Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Uganda

Mr. Norman Lamont: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Great Britain's relations with Uganda, particularly on the position of British subjects there.

Mr. Brittan: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on relations with Uganda.

Mr. Greville Janner: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will pay an official visit to Kampala.

Mr. William Hamilton: asked the Secretary of State for Foreign and Commonwealth Affairs if he plans to suspend diplomatic relations with Uganda.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Crosland): I have now considered the future of our relations with Uganda. These relations have a long and troubled history. The events of recent weeks have again demonstrated that it is not possible for our High Commission effectively to discharge its normal duties. Two members of the High Commission have been expelled for no good or adequate reason.
I have therefore decided that we should break diplomatic relations with Uganda. The Ugandan authorities are being so informed this afternoon in London and in Kampala.
We have for the past two weeks been advising the British community in

Uganda that they should seriously consider leaving. My best estimate is that all but some 200-plus have now left. Those who remain are mostly residents of long standing who well understand the risks which they run in staying in Uganda.
I have asked the French Government to look after our affairs, and they have generously agreed to do so. I propose to leave a British interests section in the French Embassy to assist them in carrying out this task.
The Government have done their utmost to help and advise our people in Uganda. Bearing in mind the interests of those who remain, I hope that the House will accept the need for some restraint in language.
I have taken this decision with deep regret. This is the first time that we have severed relations with a Commonwealth country. We have no quarrel with the people of Uganda, and we look forward to the time when it may be possible to renew our traditionally close relationship.

Mr. Lamont: I welcome the Foreign Secretary's statement. I consider that this is the right and sensible thing to do in the circumstances. Is there anything further that the right hon. Gentleman can say about Mrs. Dora Bloch? I wish to observe his request that we should exercise moderation in our remarks. Nevertheless, does he agree that the movement of Ugandan troops to the Kenyan border is extremely alarming? Has any request been received from the Kenyan Government for assistance, and in view of our great interest in this area what information has he given to the Kenyan Government?

Mr. Crosland: Sadly, I have nothing to add to the statement made 16 days ago by my hon. Friend the Minister of State on the fate of Mrs. Bloch. In the meantime the High Commission has pursued further inquiries, but it is obvious that they will get nowhere without the co-operation of the Uganda Government and there is no sign that this has been, is or will be forthcoming. We have had no statement of the precise situation on the Kenyan border. Kenya has traditionally bought most of its arms supplies from this country. We have a defence


agreement with the Kenyan Government and we propose to continue it.

Mr. Janner: There would appear to be no alternative to taking the step which the Foreign Secretary has announced today. While it is regrettable that relations with a Commonwealth country should be broken off, no one could have given greater provocation to us than President Amin. Will my right hon. Friend pay tribute to the work of the diplomats in the British High Commission in Kampala who have done so much to help the family of Mrs. Bloch, British residents still in Uganda, and those who have taken the High Commission's advice to get out?

Mr. Crosland: I am grateful for my hon. and learned Friend's opening remarks. I think it is true, as I understand it from a large number of hon. Members, that the family of Mrs. Bloch accept that everything possible was done by the Government. I would like to pay tribute to successive British members of the High Commission in Kampala who have carried out their duties, and will do so to the last moment, in circumstances of grave and serious danger.

Mr. Maudling: On this side of the House we entirely support the action of the Foreign Secretary, and we wish to associate ourselves with the tributes to the British High Commission staff in Kampala.

Mr. Hamilton: While welcoming what my right hon. Friend has said, may I ask him whether other Commonwealth Governments were consulted before the decision was taken? What will happen to the aid which is now given by the Government to Uganda? Also, can my right hon. Friend tell us where General Amin is at the moment?

Mr. Crosland: I have nothing further to tell the House on the last part of my hon. Friend's question. I did not have widespread multilateral consultations on this issue, because I do not think that that is the right way to approach it. It is a bilateral issue between the United Kingdom and Uganda, and it should be dealt with in that manner.
No aid has gone to Uganda since 1972, when the Ugandan Asians were expelled.

We have precisely 11 supplemented teachers in Uganda at the moment on contract to the Uganda Government. We supplement their salaries, and we pay the supplements direct to the teachers. We have given them the same advice as we gave other British citizens in Uganda and I think they will accept it. Otherwise, and I would stress this, no aid has gone to Uganda since 1972.

Mr. Gorst: I welcome the Foreign Secretary's statement on behalf of the relatives of Mrs. Bloch who live in my constituency. I understand that there is an imbalance of trade between this country and Uganda which between January and June this year was running at the rate of about £14½5 million. Will this imbalance continue in the light of the right hon. Gentleman's statement, and is it in this country's interests that it should do so?

Mr. Crosland: The hon. Member is quite right about his facts. Last year we exported about £7 million worth to and imported about £23 million worth from Uganda. There is thus an imbalance in Uganda's favour. As the hon. Gentleman can imagine, I examined this position very carefully. Nothing would be gained by our trying to reduce the minuscule £7 million of exports. There is a complicating factor in the question of imports, should we wish to take action in that direction. It is that virtually all these imports, most of which are of coffee, are governed by the Lomé Convention. It would be difficult to do anything without being in breach of that convention. Apart from that, Uganda could achieve the same net result by re-exports going through another country, so that although the facts are as stated by the hon. Gentleman they do not open up any opportunity for effective action.

Mr. David Steel: We accept the inevitability of the right hon. Gentleman's statement and hope for a return of better days to that unhappy country. Will the Secretary of State pay a tribute to the missionaries and those who have given long service to Uganda and who intend to remain to serve the Ugandan people? Now that we have broken off diplomatic relations, will he arrange for stricter checks to be made on the sort of equipment we are supplying to the Uganda Government?

Mr. Crosland: I have not had the privilege, as my right hon. Friend the Prime Minister has, of meeting these missionaries who are so determined to stay in Uganda in spite of the risks and provocations. I strongly echo that tribute. On the hon. Gentleman's last point, I think I know what he has in mind, and since hearing from him on the subject I am looking very carefully at the case again.

Mr. George Cunningham: Is it not a curious reflection on the illogicality of our citizenship law that General Amin is a British subject? More seriously, will my right hon. Friend say whether the British interests section attached to the French Embassy will have full diplomatic immunity, and will that section be composed of United Kingdom-based staff?

Mr. Crosland: On the first point, I am not expert enough either to assent to or dissent from the remarks my hon. Friend has made and which sounded extremely plausible to me. On the second point, the British interests section will have diplomatic immunity.

Mauritius

Mr. Robin F. Cook: asked the Secretary of State for Foreign and Commonwealth Affairs if he will pay an official visit to Mauritius.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Edward Rowlands): My right hon. Friend has no plans at present to do so.

Mr. Cook: Is my hon. Friend aware that there is very grave concern that several years after the evacuation of Diego Garcia not a penny of the money paid to the Mauritius Government has been handed over to the islanders? What was in the report submitted to my right hon. Friend by Mr. Prosser on this matter? Is my hon. Friend prepared to stand by the assurance given to me last February in a letter that the facilities at Diego Garcia will not permit the operation of B52 bombers?

Mr. Rowlands: We have felt concern on the first part of my hon. Friend's question, and that is why we support Mr. Prosser's mission and report. The report, however, is to the Mauritius Government, not to us. Therefore, it is first and foremost for the Mauritius Government to respond and to publish it if they

wish. I can confirm that B52 bombers will not be used in Diego Garcia.

Mr. Spearing: Is my hon. Friend aware that under the Lomé Convention Mauritius sends this country about one-third of our sugar cane requirements, and that under the existing terms of the convention the Government have to face difficult choices if there is a shortfall in the crop? Will he bear this in mind at the renegotiation of the convention in 1982, and will he consult the Mauritius Government on the matter?

Mr. Rowlands: We will consult and consider all the issues arising from the renegotiation of the Lomé Convention.

Mr. Marten: May we have a clear statement that the plight of the Diego Garcians in Mauritius is no fault of the British Government and that it is much more a Mauritian responsibility than ours?

Mr. Rowlands: We have not been responsible for the welfare of the Diego Garcians since they went to Mauritius. The amount of money paid was a full and final settlement.

Communications Monitoring Agreement

Mr. Litterick: asked the Secretary of State for Foreign and Commonwealth Affairs if he will undertake to review the operation of the 1947 agreement between the United Kingdom and the United States of America on communications monitoring.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): It is the long-established practice of this House that the Government do not comment on matters of this kind.

Mr. Litterick: I do not think I can honestly say that I am grateful for that answer, but is my right hon. Friend aware that the American National Security Agency has been using its four communications facilities in this country —at Edzell in Scotland, at Chicksands, at Cheltenham and in Hampshire—to monitor the communications of British commercial organisations, in violation of the secret 1947 agreement, and to relay them to their American competitors? Will he assure the House that as a matter of urgency he will undertake discussions


with the Secretary of State concerning this fact, which has been revealed by a former employee of the agency, with a view to ending this covert subversion of British economic interests?

Mr. Hattersley: I have nothing to add to my original reply, which should in no way be taken as endorsing any of the facts that my hon. Friend purports to give to the House.

USSR (Exit Visas)

Mrs. Hayman: asked the Secretary of State for Foreign and Commonwealth Affairs if he will raise with the USSR the issue of exit visas for the reuniting of families in accordance with the Helsinki Agreement.

Mr. Ronald Brown: asked the Secretary of State for Foreign and Commonwealth Affairs if he will raise with the Union of Soviet Socialist Republics the issue of exit visas and the reuniting of families, with particular reference to Ida Nudel, in accordance with the Helsinki Agreement.

Mr Moonman: asked the Secretary of State for Foreign and Commonwealth Affairs if he will raise with the Government of the Union of Soviet Socialist Republics the issue of exit visas for the reuniting of families, such as the case of Ida Nudel, in accordance with the Helsinki Agreement.

Mrs. Bain: asked the Secretary of State for Foreign and Commonwealth Affairs if he will raise with the Union of Soviet Socialist Republics the issue of exit visas for the reuniting of families in accordance with the Helsinki Agreement.

Miss Boothroyd: asked the Secretary of State for Foreign Affairs if, in accordance with the Helsinki Agreement, he will request the Government of the Union of Soviet Socialist Republics to grant exit visas to those people wishing to be reunited with their families in other parts of the world.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. John Tomlinson): My right hon. and noble Friend the Minister of State saw the Soviet Chargé d'Affaires on 26th July and exchanged views with him on the implementation of the Helsinki Final Act. The reunification of families was

one of the points discussed. It would not, I suggest, be in the interest of those most directly concerned for me to enter into detail concerning individual cases. But the Soviet authorities can be in no doubt of the strength of feeling which rightly exists in this country about cases such as that of Ida Nudel.

Mrs. Hayman: Is my hon. Friend aware that some of us feel that it is most important that we and the Government, even if they have to do it in private, should make perfectly clear to the Soviet authorities our concern about cases like that of Mrs. Nudel, who wishes to join her husband and her family in Israel? Is my hon. Friend satisfied with the Soviet authorities' implementation of the Helsinki Agreement when they continue to harass citizens whose only desire is to join their families outside the USSR?

Mr. Tomlinson: There can be no doubt that we shall not be satisfied until all the provisions of the Final Act have been put into effect by all the signatory States. Any proper assessment must await the 1977 review conference. It would not be helpful to enter into detailed discussion of individual cases. We believe that progress is more likely to come from private representations than from public complaints. The Soviet Government can be in no doubt about the strength of feeling which Ida Nudel's case has rightly aroused in this country.

Mrs. Bain: Does not the Minister recognise that both the House and the Government have a moral obligation to make clear to the USSR the strength of feeling of individual Members about the failure of the Soviet Union to implement the Helsinki Agreement? Is he aware that letters sent by Members of this House to prisoners of conscience in the USSR, even when written in Russian, are sent back directly to the Member with no reason given by the Soviet Embassy?

Mr. Tomlinson: We shall not be satisfied until all the signatory States have observed all the requirements of the Final Act. The Soviet authorities fully understand the strength of feeling of hon. Members, a feeling which goes further than this House. That feeling has been


made abundantly clear to the Soviet authorities, and it will continue to be made clear to them as long as we think that there are cases in which that is necessary.

Mr. Moonman: Is my hon. Friend aware that Ida Nudel has applied for an exit visa every year since 1971, each application having been refused, and that she has recently been told not to apply again until 1980 although she wants to rejoin her family? Does this not make a mockery of the Soviet signature on the Helsinki Agreement?

Mr. Tomlinson: I am fully aware of that, and there has been detailed discussion of the Ida Nudel case. Our strength of feeling has been made clear to the Soviet authorities and we shall continue to press the case. There can be no doubt that the strength of feeling has been underlined on each and every occasion. It has been made clear that we shall not be satisfied until all the requirements have been observed.

Sir John Hall: To what extent have the Soviet Government implemented the letter or spirit of any part of the Helsinki Agreement?

Mr. Tomlinson: The Soviet Government have begun to apply the Final Act's provisions in a number of respects. A note detailing the action they have taken appeared in Hansard of 10th March. The main subsequent development has been the Soviet notification of a second military manoeuvre which took place from 14th to 18th June in the Leningrad military district.

Miss Boothroyd: What test does my hon. Friend's Department apply before making known to a signatory to the agreement that it is in breach of its provisions? Instead of waiting for another 12 months, will he on this first anniversary of the Helsinki Agreement refer to the United Nations any such breach in the provisions and ask them to monitor the agreement to ensure that it becomes a living reality for all people and not only for this one particular family?

Mr. Tomlinson: I share the strength of feeling that leads my hon. Friend to make that suggestion. As regards breaches of the Helsinki Agreement, at

present we should be concentrating on how we propose to deal with the review conference in Belgrade next year. As that conference is about a year away, it would be premature for us now to be determining our negotiating position, but I fully note the strength of feeling and concern that leads my hon. Friend to make the suggestion that she has put forward.

Mr. Goodhew: Does not Basket III of the Helsinki Agreement include the free movement of people across the Iron Curtain? How can credence be given to the good will of the Russian Government as long as the Berlin Wall and the death strip between East and West Germany remain?

Mr. Tomlinson: I am sure that that kind of approach will give comfort to certain people, and presumably to the Leader of the Opposition in the speech that we all read she is about to make. I do not think that that kind of approach is particularly helpful. What we are seeking to do through the process of detente is to get to a situation where we can make sure that all the signatory nations observe all the requirements of the Final Act, but to start challenging each other in that contentious language is not particularly helpful.

Mr. Whitehead: Without wishing to indulge in too much sabre rattling, may I ask my hon. Friend to convey to the Soviet authorities our deep distaste of the treatment of many of their own citizens contrary to the spirit of the Helsinki Agreement, especially Mr. Moroz and Mr. Bukovsky, who have been incarcerated in mental hospitals and who may be dead before the review of the Helsinki Agreement takes place in Belgrade in 1977?

Mr. Tomlinson: We do not need pushing to make representations about those particular cases. The representations have already been made. My hon. Friend can rest assured that the Government will continue to take every opportunity of pressing those cases whenever opportunities arise.

Mr. Maudling: In view of the hon. Gentleman's strange indignation following the supplementary question of my hon. Friend the Member for St. Albans


(Mr. Goodhew), does he disagree with the substance of my hon. Friend's question about the Berlin Wall?

Mr. Tomlinson: I suggest that at the moment it would be in the interests of all of us who wish to see the policy of detente working to use more temperate language when describing the problems that we seek to overcome.

Iceland (Fisheries Negotiations)

Mr. Farr: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of negotiations between Her Majesty's Government and the Government of Iceland in relation to deep-sea fishing off the Icelandic coast.

Mr. Crosland: As I told the House on 7th June, and as the agreement with Iceland makes plain, negotiations with Iceland on a long-term agreement will be undertaken by the EEC. We have urged the Commission to produce a draft negotiating mandate as soon as possible, and I expect this to be considered immediately after the holiday break.

Mr. Farr: I thank the right hon. Gentleman for that answer but I ask him not to rely too much on the EEC reaching an agreed negotiating position by 2nd December in view of the deep differences that at the moment exist between member nations. With that in mind, and with the possibility of there being a vacuum after 2nd December, will the Foreign Secretary be prepared to maintain British fishing rights in that area in whatever way is necessary?

Mr. Crosland: I believe that the hon. Gentleman has just come back from Reykjavik and is extremely well informed on these matters. As for the EEC negotiating position, I am optimistic that that can be reached in September. I saw the Commissioner responsible for these matters only the day before yesterday. I am relatively optimistic about that. Whether that will in turn lead to an agreement between the Community and Iceland is a much more uncertain matter. Obviously there must be reservations about how likely it is that we shall reach a satisfactory agreement. I should not like to speculate on the hypothetical situation that will arise if on 2nd Decem-

ber no agreement has been reached. It will be a very unpleasant situation.

Mr. Powell: Does the accurate terminology of the right hon. Gentleman's reply confirm that membership of the Community deprived this country of the status of an independent nation and the right to negotiate as one nation with another? [HON. MEMBERS: "Rubbish." Just listen to the answer.

Mr. Crosland: I cannot accept the suggestion that accuracy of language necessarily leads to the conclusion that the right hon. Gentleman wishes to draw. The fact is that we all had our votes in the referendum one way or the other. That decision, rightly or wrongly, was taken. That limited a decision on the common fisheries policy. That policy is a fact. That means that this country now has to make the best that it possibly can of the task of revising the policy in our own national interests.

Mr. Wall: In view of the threat from the Cuban fleet and other large fishing fleets, will the right hon. Gentleman ensure that British limits are extended to 200 miles before the conclusion of a final agreement with Iceland?

Mr. Crosland: I believe that the Cuban story greatly reinforces the case for a 200-mile limit. Ideally we would do that at the same time as it is agreed at the Law of the Sea Conference. However, that looks increasingly unlikely. We had the declaration of intent made at the meeting of the Council of Ministers only yesterday morning. We hope that with the EEC we can all do it conjointly, but if there is any unnecessary delay as far as the Community is concerned we shall not have the slightest hesitation in taking action unilaterally. We are now preparing legislation to make that possible if it is necessary.

Mr. Brotherton: Following the agreement with Iceland on fisheries, will the right hon. Gentleman have talks with the Minister of Agriculture, Fisheries and Food to prevent the landing of Icelandic fish at Grimsby?

Mr. Crosland: I have always been fairly grateful to the hon. Gentleman for his solicitude for my constituents. However, I think that they still prefer to look


to me rather than to him for their protection. I continually have meetings with my right hon. Friend the Minister of Agriculture, Fisheries and Food, and the point that the hon. Gentleman has made is something about which we often exchange views.

Southern Africa

Mr. Luce: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the situation in Southern Africa.

Mr. Rowlands: We continue to be concerned about the problems of Southern Africa and will make every effort to promote solutions to them. As far as Rhodesia is concerned, there is a Question down for answer later this afternoon.

Mr. Luce: As the Soviet Union and Cuba stand to gain most from the growing violence in Rhodesia, will the Minister and the British Government make it absolutely clear to the black and white Rhodesians over the coming weeks that, if they continue on this course of mutual destruction and fail to agree on a sensible transition to independence, they will prevent the West, led by Britain, from coming to their help and facilitating a sensible transitional period?

Mr. Rowlands: We shall continue to make it clear that the best solution to the problem is a rapid move to majority rule in accordance with the wishes of the House and, I think, of the majority of people.

Mr. Hooley: Given that the armed forces of Mozambique are in warfare with the rebel forces in Rhodesia, that the forces of South Africa are attacking Zambian territory and that there is guerrilla war in Namibia, will the Government please give up the absurd pretence in the Security Council that the situation in Southern Africa is not a threat to peace?

Mr. Rowlands: We do not think that the Chapter 7 declaration which is implied in my hon. Friend's question is valid at the moment. We shall continue to uphold that position. I accept what my hon. Friend has said about the growing increase in violence. The only way to stop it is to go to the root cause—the obdurance of Mr. Smith in Rhodesia.

Mr. Pardoe: What is the Government's attitude to the forthcoming independence of the Transkei? Will the Government be represented at the independence celebrations in October, and will their attitude depend in any way on the result of elections in September? Will the Government or the United Nations have representatives at the elections?

Mr. Rowlands: The traditional criteria used in deciding whether to recognise an independent new Government or State will be applied to the Transkei, but, as my predecessor said, we do not think that on present evidence we should recognise Transkei.

Mr. Groeott: Will my hon. Friend be a little more forthcoming and emphasise that the cynical attitude of the South African Government in establishing so-called independent States is seen as a cynical policy and that in no sense could these States be regarded as economically or politically independent? Would it not be a great service to the people struggling for majority rule in Africa if the Government made plain now that they will not recognise the Transkei under any circumstances?

Mr. Rowlands: We shall judge this issue on the traditional criteria, but we feel that there is strong evidence to suggest that we should not recognise the Transkei.

Mr. Amery: Can the Minister confirm or deny that Mozambique troops have taken the offensive by crossing into Rhodesia? If they are pursuing a policy of solution by violence rather than by imposing sanctions and economic pressure, will the Government reconsider their decision to give aid to Mozambique?

Mr. Rowlands: I have seen reports but have not yet had confirmation in detail or any evidence to confirm that there is Frelimo activity in Rhodesia. However, we have repeatedly stated that we do not believe that external forces should be used to solve the problems of Rhodesia and Namibia and the other standing problems in Southern Africa. Aid to Mozambique is a separate question which we have repeatedly defended in the House and which has been supported by Commonwealth Governments, including New Zealand, Australia and others.

Cyprus

Mr. Hastings: asked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied that the Turkish Government are abiding by the 1975 Vienna Agreements on Cyprus.

Mr. Hattersley: The Turkish Government were not a direct party to the understandings reached between the Cypriot communities at the intercommunal talks held in Vienna. We hope that those talks will soon he resumed and that both parties will make a constructive contribution.

Mr. Hastings: I appreciate the right hon. Gentleman's difficulties, which he has explained to me, but would he not agree that the policy of the Turks looks increasingly like annexation and that this would be against international law? Will he consider the possibility of a new initiative —for instance, a visit by a British or NATO mission into the Turkish area in northern Cyprus to investigate the position of the Greek Cypriots and British citizens there?

Mr. Hattersley: I have told the House on many occasions and am glad to repeat it today that, if we believed that progress could be made either unilaterally through a British initiative or through an initiative that we could encourage in the Commonwealth, the EEC or any other body, we should be happy to promote it. It remains our view, however, that the best chance of progress is to reconstitute the intercommunal talks and for them to take place in a meaningful way with matters of substance on the agenda. That is also the view of Turkey and Greece, and we must work to that end.

Mr. Christopher Price: Is my right hon. Friend aware that tension between Greece and Turkey is now more serious than at any time since the war? Is he aware that simply repeating the same answer Question Time after Question Time is not good enough in view of our particular responsibilities to Cyprus? Has he had any discussions with his EEC colleagues about methods of solving this problem?

Mr. Hattersley: I repeat the answer week after week because it seems to be right. In reply to my hon. Friend's second question, this matter was raised yesterday afternoon during the political

co-operation discussions between the Community and the Greek Government. Discussion took place not only between EEC Foreign Ministers but also with a senior member of the Greek Cabinet, who shared my view rather than that of my hon. Friend.

Mr. Townsend: Why do not the Government take a far more robust attitude to the importing of Turkish peasants from the mainland into Northern Cyprus? Does not such action undermine the talks on the future of the island?

Mr. Hattersley: We have expressed our strong disapproval of Turkish resettlement of the northern part of the island on several occasions, and I shall continue to express it as robustly as the hon. Member cares it to be expressed. But our main aim must be to press, in whatever way we can, for an overall solution, and we must use our best endeavours to make the intercommunal talks work.

Mr. Corbett: Has my right hon. Friend had any recent conversations with Commonwealth countries with a view to getting an early resumption of the intercommunal talks?

Mr. Hattersley: We have had conversations at various levels with all parties who seem likely to be able to promote that end. I believe that the talks will be resumed sooner or later and that the parties will begin to talk about material matters. I understand the House's regret and frustration that this tragic affair has gone on for so long, but it is our judgment that the only possible solution can come from those talks.

Mr. Maudling: I recognise that any major new initiative will probably have to await the American presidential elections, but is the right hon. Gentleman aware that there is grave concern that in the meantime the situation will get much worse with the expulsion of Greeks and the arrival of Turks? Is there no way, either through the EEC or the United Nations, to bring pressure on the Turks to ensure that this does not continue?

Mr. Hattersley: There is not much pressure which can be brought on the


Turks which would provide a solution. One of my hon. Friends recommended some months ago that such pressure should be brought to bear, and the American Administration tried to bring it to bear. It did not work or help to make any progress in the talks about a solution. I do not believe that pressure or condemnation by this country will bring a solution.

Mrs. Jeger: Has any progress been made with the Turkish Government on the claims for loss and damage submitted by United Kingdom citizens who have been waiting patiently for more than two years for recompense for the outrages they suffered as a result of the Turkish invasion?

Mr. Hattersley: There has been a deplorable lack of progress in this area. My hon. Friend the Under-Secretary made representations to the Turkish Government some weeks ago and will continue to press hard on this matter. I regret that I cannot tell the House and my hon. Friend that progress is being made at the speed which is essential.

Mr. Jim Spicer: I do not wish to apportion blame to the Greek or the Turkish community in Cyprus, but would not the right hon. Gentleman agree that since 1960 it has been shown that it is impossible for those communities to live together other than within a federated Cypriot State? Will he press for that solution in the long term?

Mr. Hattersley: The hon. Gentleman asks me to interpret history and to endorse the decision that he believes history has brought about. I do not believe that this is the way to reach a solution. Our position is that we shall support whatever form of future constitution the people of Cyprus want and that we shall provide whatever support they need to bring about that constitution. Our attempts to get the talks going will not be facilitated if I express the Government's view on which solution is preferable.

Taiwan

Mr. Brotherton: asked the Secretary of State for Foreign and Commonwealth Affairs if he will seek to pay an official visit to Taiwan.

Mr. Rowlands: No, Sir.

Mr. Brotherton: Has the attention of the Foreign Secretary been drawn to Early Day Motion No. 513 about cheap suits from Taiwan? Is he aware that if he went to Taiwan he could buy a tail coat for £2·10 and then cease to insult the Heads of States of two continents?

Mr. Rowlands: I am sure that my right hon. Friend has read the Early Day Motion avidly. The hon. Gentleman will know that action was taken in 1975 through the EEC, which unilaterally imposed restrictions on a wide range of textile products from Taiwan.

Mr. MacFarquhar: Since one of the reasons why my right hon. Friend will not be going to Taiwan is presumably better relations with China, may I ask whether those relations with the mainland are resulting in any agreement on opportunities for British Sinologists to spend long study periods in China?

Mr. Rowlands: I cannot at this stage confirm the point, but if my hon. Friend wishes to table a specific Question about it I shall try to answer it.

Sir Anthony Royle: Is the hon. Gentleman aware that I welcome the statement that his right hon. Friend does not intend to visit Taiwan? However, would he care to make a statement regarding the activities of the Taiwanese Government within Hong Kong? Is he aware that there is considerable concern about the activities of KMT people within Hong Kong? Will he let the House know his views about this?

Mr. Rowlands: I shall certainly take note of that point. I do not have any details about it.

Mr. Cryer: Does my hon. Friend accept that the quota restrictions that the Government have imposed on textiles from Taiwan are inadequate? Does he further agree that it is the duty of the British Government to try to persuade the Taiwanese Government to stop the gross exploitation by capitalism in that country, so that working people in Taiwan have at least decent wage levels and the standards that working people enjoy in this country? The British textile industry does not mind competition, but it objects to gross exploitation and unfair competition.

Mr. Rowlands: I doubt whether we have very much influence on the domestic economic policy of Taiwan. However, we are certainly keeping the situation regarding the importation of cheap tex tiles under review.

Oral Answers to Questions — EUROPEAN COMMUNITY

European Commission

Mr. Arnold: asked the Secretary of State for Foreign and Commonwealth Affairs if he can announce the terms of reference for the review of the staffing, structure and political role of the EEC Commission.

Mr. Forman: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement setting out the terms of reference for the proposed review of the role of the EEC Commission to be carried out by the next President of that institution.

Mr. Marten: asked the Secretary of State for Foreign and Commonwealth Affairs whether he has any proposals for restructuring the organisation of the Common Market.

Mr. Moate: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the terms of reference for the proposed review of the role, staffing and structure of the EEC Commission.

Mr. Crosland: At the European Council meeting on 12th and 13th July, my right hon. Friend the Prime Minister suggested that the new President of the Commission might be invited to undertake a review of the staffing, the structure and the organisation of the Commission. This suggestion, which arose out of the discussion, was welcomed and my right hon. Friend was asked to prepare terms of reference for consideration at the next meeting of the European Council.

Mr. Arnold: How much independence should be allowed to EEC Commissioners in the conduct of their portfolios, given the collegiate role prescribed for the Commission in the Treaty of Rome? Does the setting up of the review imply that the Government's thinking is moving away from this vast concept?

Mr. Crosland: No, Sir. I do not think that the setting up of the review—which

must be some way away; we still do not have any terms of reference agreed—implies any altered view on the part of the Government. The question raised by the hon. Gentleman about the arguments between a collegiate system, on the one hand, and, on the other hand, a series of independent Commissioners with independent portfolios could easily be covered by the terms of reference and could form the subject of an extremely interesting discussion.

Mr. Arthur Lewis: Will my right hon. Friend bear in mind that some of us, including myself, think it somewhat obscene for members of the British Government to take jobs at an alleged £60,000 per year, tax-free, when they are alleged to be all in favour of a pay and prices policy—except when it affects them—and when we know that British taxpayers have to pay this, if only in part?

Mr. Crosland: The trouble is that we all find different things obscene. My own view is that my right hon. Friend the Home Secretary will make an outstandingly able President of the Commission.

Mr. Arthur Lewis: Yes, at £60,000 a year he ought to. I hope that he does better than he has done as Home Secretary.

Mr. Crosland: I have no detailed knowledge of what financial arrangements he will make, but I am sure that they will be made within a proper framework of prudence and principle.

Mr. Forman: May we take it from the right hon. Gentleman's first reply to this group of Questions that his right hon. Friend the Prime Minister and himself still have not worked out exactly what the terms of reference might be for such a review? If that is so, will he at least give some indication of whether this is really no more than a cosmetic exercise or whether it really is the fundamental review that some of us thought might be the case from the original remarks of his right hon. Friend?

Mr. Crosland: My right hon. Friend the Prime Minister has certainly not yet worked out the proposed terms of reference in detail. I think that he intends the review to be a major one—not so much of the political role of the Commission,


which is something that falls to be discussed under the aegis of the Tindemans discussions at this stage, but as to staffing, structure and organisation. The initiative taken by the Prime Minister does not betoken any lack of confidence in Signor Ortoli or any of the present members of the Commission, but I think that at any time it is proper to conduct a reorganisation of this kind and that it is a worthwhile thing to do.

Mr. Raphael Tuck: Is my right hon. Friend aware that more than 80,000 tons of home-produced food is now being withheld from the open market under EEC rules, including 30,000 tons of butter, that the British beef mountain reached 14,000 tons by the end of June, and that stored beef is accumulating faster than it is being sold? [An HON. MEMBER: "Reading."] I am not reading. Stored beef is accumulating faster than it is being sold. For how long are we to participate in this mad charade?

Mr. Crosland: I found that an extremely interesting question but not one strictly relevant to the Questions under discussion.

Mr. Raphael Tuck: On a point of order, Mr. Speaker. It was relevant to Question No. 46.

Mr. Marten: As the Dutch Foreign Minister, who is the President-in-Office of the Council of Ministers, said in his speech to the European Assembly on 7th July that the Common Market is stagnating, declining, sterile, ineffective and disintegrating, and that the structure is in an advanced state of erosion—those were his views, and I think that I share them —is it not quite absurd that we should now be proceeding to direct elections to a Community in that state before the whole thing is restructured, if it ever can be? Will not the direct elections really be no more than—I borrow an expression from my hon. Friend the Member for Carshalton (Mr. Forman)—merely another daub of cosmetic upon an already withering bureaucracy on the Continent?

Mr. Crosland: The next Question but one is on the subject of direct elections.

Mr. Greville Janner: Under the present structure, who is able to protest about the aid to be given by the EEC to Uganda? Will my right hon. Friend give details of this?

Mr. Crosland: Aid to Uganda and relations between the EEC and Uganda consist of two aspects. One is the relations through the Lomé Convention, under which, as the House knows Uganda is only one of a large number of countries that benefit from the favourable trading arrangements. This is a multilateral and not a bilateral agreement with Uganda. The other aspect of the matter is that the European Development Council has recently sent a team to Uganda to consider the possibility in Uganda of development aid. This was an EEC initiative and not a British one. I have taken the view that at present I am not prepared to take the initiative in trying to call off this operation, although it is something that I shall certainly keep under review.

Mr. Tugendhat: Reverting to the original terms of the Question, is the right hon. Gentleman aware that I agree with his answer about the need for reviews of this kind? Certainly there is evidence to suggest that overstaffing exists. However, if the right hon. Gentleman holds that opinion, does he not agree that as the Commission has a smaller staff than the Scottish Office, and smaller too, I believe, even than that of Harrods, this shows the necessity for a much greater review of staffing levels in the British Civil Service than in Europe?

Mr. Crosland: I was briefed on the subject of the Scottish Office, but my brief included no reference to Harrods. However, if this suggests overstaffing on the part of the British Civil Service, it also suggests overstaffing on the part of British private enterprise concerns.

Regional Development Commissioner

Mr. Crawford: asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the EEC Commissioner with responsibility for regional development.

Mr. Hattersley: My right hon. Friend has at present no firm plans for a meeting with Mr. George Thomson but he expects to meet him again soon in the course of Community business. My hon. Friend the Minister of State, Scottish Office held discussions with him on 16th July in Edinburgh.

Mr. Crawford: After the establishment of the Scottish Assembly, will the Minister ensure that the regional funds allocated by the EEC for industrial projects in Scotland are paid directly to the Scottish Assembly without any intervention by Westminster whatsoever?

Mr. Hattersley: I think that the hon. Gentleman had better put down Questions about the establishment of the Scottish Assembly to my right hon. Friend the Leader of the House.

Mr. William Hamilton: Does my right hon. Friend recognise, and can he say to the House, that considerable aid is being given to Scotland through the regional fund as a direct result of the activities of Mr. George Thomson, who knows much more than any Member of the Scottish National Party about the problems of Scotland? Will my right hon. Friend therefore say what is the future of George Thomson, because it is important that we have a British Commissioner who is responsible for regional development since it is Britain which has the best regional aid policy in the whole of Europe?

Mr. Hattersley: I certainly note and understand my hon. Friend's point about the necessity for Great Britain to keep a very close and intimate watch on the Community's regional policy. My hon. Friend is right to say that there have been substantial benefits for Scotland in all that Mr. George Thomson has done, and I am happy to join him in the tribute to George Thomson's work in the Community since he went there three years ago.

Mr. Fairbairn: When he next meets the EEC Commissioner, will the Minister undertake to discuss with him the question of the law in regard to mercenary activity? If he has read, as I hope he has, the indictment, evidence and verdict of the Angolan so-called court, he will see that there are citizens of this country, and maybe of Europe, who are in prison for crimes which the civil code under which they were tried does not even recognise?

Mr. Hattersley: I am sure the hon. and learned Gentleman knows that that has nothing to do with this Question.

Mr. Dalyell: Could not we just know what the Foreign Office thinks about the cost-effectiveness of the Scottish Office?

Mr. Hattersley: It is about as cost-effective as Harrods.

Direct Elections

Mr. Dykes: asked the Secretary of State for Foreign and Commonwealth Affairs what further steps he is planning to implement the decision reached by the Heads of Government summit on 12th July on direct elections to the European Parliament.

Mr. Hattersley: The European Council took a decision on the question of the number and distribution of seats and asked Foreign Ministers to settle the outstanding issues. The Foreign Affairs Council has done a good deal of work on these issues at its meetings this month and will return to the question at its next meeting in September.

Mr. Dykes: While appreciating that the Foreign Secretary has left the Chamber because this Question is too difficult for him to handle, may I ask the Minister of State to explain why he delayed the signing of the convention on direct elections at the Council of Ministers? Can he say when the convention will be signed?

Mr. Hattersley: I only wish that the first part of the hon. Gentleman's question was true. As regards the serious part of it, the position is that the European Council took a decision which the British Government were prepared to endorse at the subsequent Foreign Affairs Council. Although that decision was apparently endorsed by all the Heads of Government and the President of France, it was not acceptable to all Foreign Ministers. A new instrument had to be prepared which it was hoped would be a compromise acceptable to all the Nine. The British Government are examining the new proposals, and until we have done so it is not possible to say whether it meets with our approval or the date when we will be ready to sign.

Mr. Powell: Can the right hon. Gentleman state the nature of the instrument which he has under consideration? Is it a draft convention or some other form of EEC instrument?

Mr. Hattersley: It is some other form of EEC instrument, but on British suggestions it has been amended in a number of ways and the right hon. Gentleman


will find that it looks remarkably like a convention.

Mr. Thorpe: Is it not somewhat pathetic that the Prime Minister had to announce that, alone of all the Nine, Britain and Denmark were incapable of doing anything so practical and democratic as moving to direct elections by 1978 and that we would still have to nominate? Is he aware that the reason that was given was lack of parliamentary time, and that that was on the day before we were asked to approve a guillotine on four Bills to be passed within a fortnight? [HON. MEMBERS: "Five Bills."] Five Bills and three guillotines. Would not the right hon. Gentleman agree that one of the reasons for the delay is that, according to the Prime Minister, we are hell bent on using the most archaic system, under which it will take longer to draw up boundaries and to hear objections than under any other electoral system known to mankind?

Mr. Hattersley: The right hon. Gentleman has asked three questions the implication of which is wrong. My right hon. Friend the Prime Minister did not say that what has held us up is the absence of parliamentary time; he said that it was the absence of parliamentary approval. I am sure the House will welcome the Prime Minister's explanation that he could not announce a parliamentary decision on the matter before Parliament had studied the proposal.
The right hon. Gentleman is also quite wrong in suggesting that it was only the United Kingdom and Denmark who were in this position. The reason why a new instrument had to be invented rather suddenly 10 days ago—an instrument which the British Government are now considering—is that the other countries in the EEC decided that they must, like us, pay a proper respect to the realities of their parliamentary life. On the third point, I know that the right hon. Gentleman is interested in the reform of the electoral processes, and he made the point at some length in Committee upstairs.
The right hon. Gentleman is giving, however, an example of the sort of delays we might face. Because of the proper prudence in the face of that sort of argument, we have told our partners that we will be ready on time, if we can, but there is a possibility that some people—

perhaps the right hon. Gentleman—will prevent that from happening.

Mr. Heffer: Will my right hon. Friend accept that many of us think that the Government are absolutely right not to rush into this decision on direct elections? In view of the fact that only this morning the National Executive of the Labour Party decided overwhelmingly, with only a few votes the other way, to oppose the concept of direct elections, will my right hon. Friend take that into consideration when considering the whole question?

Mr. Hattersley: Yes, of course I will. The Government asked for and received evidence from all the political parties, including the party which my hon. Friend and I serve, and clearly the views of the parties in a matter of such constitutional importance have to be taken into account. I am grateful to my hon. Friend for endorsing the Government's view that we must not rush into this.

Mr. Hurd: The Minister is, of course, right that the decision rests with Parliament and not the Government. Was not this point safeguarded in the statement made by the Prime Minister only yesterday? Does it not look as though, because of the three Divisions we have just heard about, he allowed himself to be out-manoeuvred inBrussels and it looks as if once again it has been Britain which has held things up?

Mr. Hattersley: The hon. Gentleman may put that interpretation on it, but I do not think that anyone in Brussels did. I think that this morning the papers reported that some of the Commissioners felt that our decision was wholly natural and wholly reasonable. The hon. Gentleman may think that the defence of parliamentary rights in some way ought to be taken into account, and I had to make absolutely sure that the proper safeguards were included in the new instrument. I have no doubt that I was right to take that attitude.

Wales (Parliamentary Representation)

Mr. Wigley: asked the Secretary of State for Foreign and Commonwealth Affairs how many representatives there are likely to be from Wales in the latest model of a directly-elected European Assembly; and in what way the Govern-


ment foresee co-ordination between Members of the European Assembly and the proposed Welsh National Assembly at Cardiff.

Mr. Hattersley: The distribution of seats within the United Kingdom remains a matter for national decision. Her Majesty's Government will put forward proposals to the House in due course. In considering whether any machinery for co-ordination is necessary between the Members of the European Assembly and the proposed Welsh and Scottish Assemblies, the Government will wish to take into account the views of the Select Committee on Direct Elections, which has stated its intention to cover this question in a later report.

Mr. Wigley: Is the Minister aware that if Wales gets five out of the 81 seats, as has been widely reported in the Press, it will mean that we shall get one-third of the representation of Ireland with its 15 seats according to this model? It will also mean that Luxembourg, with a population the size of only Gwent, will have six seats, compared to Wales' five. Does that not therefore indicate that Wales should be singled out as part of the United Kingdom representation?

Mr. Hattersley: Let us assume that the figure the hon. Gentleman offers is right. The answer to his hypothesis is that Wales will benefit in two ways: first, through the Members elected to the European Parliament directly from Wales, and, secondly, directly as a result of the Members elected on behalf of the United Kingdom.

Mr. Kinnock: Does my right hon. Friend accept that only the blinkered view of nationalism could cause this preoccupation with numbers and that, in view of the total absence of any constituency relationship as we have hitherto understood it of representatives to the European Assembly, the regional or national distribution of seats in this country is virtually irrelevant to the question of a directly-elected Assembly?

Mr. Hattersley: I do not accept that an Assembly of the size that is now proposed, with Britain receiving the number of seats proposed, means that there can be no constituency relationship between Members and the people who elect them.
When the Select Committee, on which my hon. Friend and I both sit, considered the recommendation that it wanted to make on size and numbers—a recommendation which has been incorporated into the European decision—it took the decision it did because it wanted constituencies sufficiently small to enable a Member to have a proper relationship with his electorate, and I am sure that that will happen.

Mr. Tim Renton: In their devolution model, do the Government envisage that it will be possible for an individual to sit as a Member of the Welsh Assembly, a Member of the House of Commons and a Member of the European Assembly? If so, will the pay policy apply to such individuals?

Mr. Hattersley: I am not sure whether the hon. Gentleman is asking whether it will be legally or physically possible. I should think that it would be physically impossible, and the hon. Gentleman had better examine the legal possibility when he sees the Bill which sets up the Assemblies and the Bill which will give force to the decision on direct elections.

Mr. Dalyell: I have in my hand a letter of October 1974 addressed to her colleagues by the hon. Member for Moray and Nairn (Mrs. Ewing) in which she refers to a Scottish Royal Air Force and says that there will doubtless be an English and Welsh Royal Air Force too. That letter was quoted at some length in the Adjournment debate at 10 o'clock this morning. Has my right hon. Friend any thoughts on the possibility of a Welsh Royal Air Force air attaché in Luxembourg?

Mr. Hattersley: I have only two thoughts on the subject. The first is that hardly anything that the hon. Lady suggests could surprise me. My second thought is that if anything surprised me I am sure it would be reported by my hon. Friend.

Sir A. Meyer: Will the right hon. Gentleman ensure that the Secretary of State for Wales energetically supports in Brussels attempts to get regional aid for projects in Wales, particularly projects for which regional aid has been refused by the British Government, such as the entertainments centre in my constituency?

Mr. Hattersley: I cannot comment on the individual case to which the hon. Gentleman refers, but it is the British Government's belief that regional policies as well as regional aid should have a far more prominent position in the overall strategy of the Community, and we shall go on pressing for that.

SUB JUDICE RULES

Mr. Christopher Price: On a point of order, Mr. Speaker. I wish to raise with you the general position of the House of Commons on the sub judice rules. I do not wish in any way to ask you to reverse your decision of yesterday, but I wish to raise further the general principle that cases such as that to which I referred yesterday are becoming more important and that the House should take these matters more seriously.
The rules on sub judice are to be found in "Erskine May" on page 427, and hon. Members can read what is stated there. Broadly, the new rules were introduced in 1972 as a result of the Industrial Relations Act, in the hope that not only in cases involving the Industrial Relations Act but in other civil cases the House would have far greater freedom than it had had before to discuss matters which had not been concluded before the courts.
The Resolution of 1972 asks you, Mr. Speaker, in making your decision, to exercise your discretion on two matters: first, is it a ministerial decision unchallengeable in court except on grounds of bad faith or misdirection? Secondly, is it an issue of national importance such as the national economy, public order or the essentials of life?
I ask you, Mr. Speaker, to attempt to rule on a matter which the former right hon. Member for Carshalton, Mr. Carr, when he was Leader of the House, failed to explain—what the House means by "the essentials of life" in this connection.
The Resolution also asks you to take account of various paragraphs of the Report of the Select Committee on Procedure, in particular, of paragraph 25, part of which I shall read:
In any case in which a Minister has made an application to a court or has initiated proceedings on a matter of national importance, Your Committee are of the opinion that certain considerations should influence Mr. Speaker in the exercise of his discretion as to

whether to restrict comment in the House. The first such consideration is the fundamental responsibility of Parliament to be the supreme inquest of the nation with the overall responsibility to discuss anything it likes. The second is whether a danger exists that the conduct of a case may be prejudiced by Parliamentary inquisition or debate on the arguments which the Minister is presenting to the court.
The Resolution fundamentally changed our sub judice rules from the previous position which had been set up in 1963. In my view, in cases being dealt with in the courts in which no jury but simply a judge is involved, on the issue of influencing the court the House should take a fairly relaxed view and put greater emphasis on the first of those principles in paragraph 25 about our responsibility to be the "supreme inquest of the nation"
There are occasions, Mr. Speaker—for example, yesterday—when it has not proved possible to give you notice. On those occasions Back Benchers should be allowed to deploy arguments in support of a proposition which may run contrary to a ruling which you have given. I should like your ruling on that general principle, which is an important principle for Back Benchers, as there is a suspicion—which I am sure is not justified—that Front Benchers can get away with murder but that Back Benchers are very much restricted in this respect.
There is one other matter to which I wish to refer. It concerns the relationship between the House of Commons and the courts, that goes back to the ancient relationship between the High Court of Parliament and the High Court of Justice. It is made clear on page 428 of "Erskine May" that we cannot criticise judges, but that should not restrict us from criticising judgments—the decisions which judges make. I am encouraged by what your predecessor said, Mr. Speaker, in his ruling prior to the Industrial Relations Act debate in 1973:
It can be argued that a judge has made a mistake, that he was wrong, and the reasons for those contentions can be given within certain limits."—[Official Report, 4th December 1973; Vol. 865, c. 10921
The two epithets which I used yesterday were in no way directed at the judges. They were directed at the judgments, which I heard, having sat through both the divisional court and the Court of Appeal hearings.
When Lord Justice Scarman was ruling on Attorney-General v. Times Newspapers Limited in 1973, he said:
The courts, subject only to the legislative power of Parliament, determine what constitutes contempt of court and have a discretion as to remedy and punishment. Nevertheless, a serious and, perhaps, dangerous situation could arise if the practice of the courts differed substantially from that of Parliament.
In my view, that dangerous situation has arisen now. In the Thalidomide case The Sunday Times was gagged but Parliament was free. We have now come across a case where Parliament is gagged but the newspapers are free. We need to get this straight.
It was made straight by the present Lord Chancellor in a debate on procedure in Parliament when he said:
The basic principle relating to proceedings in Parliament—and in that expression I include debate, Questions and answers, Motions and Reports—is still that which is contained in such splendid and clear clarion terms in Article 9 of the Bill of Rights of 1688,
He quoted from the article which said:
'That the freedom of speech and debate or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament.'
He went on:
That should be emphasised, because it is at the heart of the issue of what Parliament can discuss and what it should discuss. Parliament's right to discuss matters of public importance and to say what it likes about them is paramount, irrespective of any prejudicial effect which may result outside Parliament. That right of Parliament must be jealously guarded by us, its trustees, its Members."— [Official Report, 28th June 1972; Vol. 839, c. 1599–1600.]

Mr. Peyton: Mr. Peyton rose—

Mr. Speaker: Order. The hon. Member for Lewisham, West (Mr. Price) is on a point of order. I shall hear the right hon. Member for Yeovil (Mr. Peyton) immediately afterwards.

Mr. Price: I was concluding, but this is an important matter. It is absurd that in The Times today there can be an article in the middle page setting out, in moderate and general terms, the issues in a particular case, and, indeed, that every paper in the land can write about it, while we are alone in being restricted from even mentioning the subject.

Mr. Peyton: Further to that point of order, Mr. Speaker. The Leader of the

House will have heard the point of order. Will he make arrangements to have a debate on this exceedingly extraordinary and important matter in Government time? Meanwhile, the House should not use up any further time. [HON. MEMBERS: "Why not?"] Because we are under the guillotine. The point that I am making is that we are subject to the guillotine under some protest and that we would take it amiss if hon. Members on the other side of the House were willing to impose further limitations upon the time available to the Bill.

Mr. John Mendelson: Further to that point of order, Mr. Speaker. I submit with respect that the right hon. Member for Yeovil (Mr. Peyton) is completely out of order in trying to tell hon. Members what they are to discuss and what they have no right to discuss. That is up to the Chair. The right hon. Member did not contribute to the debate on this point of order. The point of order raised by my hon. Friend the Member for Lewisham, West (Mr. Price) is of the greatest importance to both Back Benchers and Front Benchers. It is important that we should have an opportunity to return to the subject.
As you know, Mr. Speaker, an attempt was made in moderate terms yesterday to persuade you to hear out my hon. Friend when he tried to raise the point in the first place. It is not possible for Back Benchers on all occasions—although they try to do so, Mr. Speaker, as you know from experience—to give you notice of a point of order, particularly when other institutions of the State are involved. Sometimes a judgment may be reported only an hour or two before the House meets.
The House is the central, political and constitutional forum of the nation. Hon. Members and the Chair should agree that in future an hon. Member should be allowed to make his point of order in good faith and to be heard to the end even if he has not given you notice.

Mr. Speaker: I am much obliged for the way in which hon. Members have raised their points of order. I was given notice that the hon. Member for Lewisham, West (Mr. Price) would seek to raise the matter. I consider that hon. Members have raised very important matters for the House and for me. I am


anxious that there should be no dubiety on the question and I ask the House to allow me to rule on the matter tomorrow.
The right of hon. Members to be heard on a point of order—and I hope that they will bear this in mind—does not extended to criticism of the courts, or of their decisions, in a manner which impugns their motives or which is calculated to impair the administration of justice. Such criticism can be expressed only in a substantive motion. I shall give my ruling tomorrow.
I have an application under Standing Order No. 9 and a Ten-Minute Rule Bill before we come to the Aircraft and Shipbuilding Industries Bill. A sense of fair play should prevail.

QUESTIONS TO MINISTERS

Mr. Litterick: On a point of order, Mr. Speaker. I wish to raise a matter which is not unrelated to the subject raised by my hon. Friend the Member for Lewisham, West (Mr. Price). 'Whilst I understand that you are in no way responsible for the content of ministerial answers, I am sure that you noticed that the Minister of State explicitly refused to answer my question about industrial espionage being conducted by the agency of a foreign Power. How are my rights as an hon. Member to represent the interests of my constituents to be protected from the self-assumed powers of the Executive to define, arbitrarily, what is sensitive and what is not sensitive, and therefore to define what we shall discuss and what we shall not discuss on behalf of our constituents? That seems to be a severe and unjustifiable constraint on our responsibilities to our constituents. The matter is one of central importance to my constituents and, I submit, to the whole of the British people and I would, therefore, appreciate your advice.

Mr. Cryer: On a point of order, Mr. Speaker. The Minister of State said that it was not the practice to answer or to go into any detail about the serious allegations which my hon. Friend the Member for Birmingham, Selly Oak (Mr. Litterick) made which were to the effect that a foreign Power, through an agreement under our communications system, was spreading commercial information which

was secret and particular to this country. Although I was on my feet when the matter was raised you called only the hon. Member who put down the Question. I know that you are in no way influenced by the Minister, but will you make it clear that merely because a Minister says that it is not the practice to discuss a matter concerning a Government cover-up or Executive decision does not inhibit you from calling on whom you like to ask questions of the Executive when you choose because, surely, we must have open information and debate?

Mr. Speaker: I shall first reply to the hon. Member for Birmingham, Selly Oak (Mr. Litterick), who said that he was dissatisfied with a reply to a Question. I shall look at his request to see whether there is any way in which I can help him. But I served under five Speakers in the House and none of them was able to find a way and I doubt whether I can. I shall have to see what I can do.
I turn now to the matter raised by the hon. Member for Keighley (Mr. Cryer). Of course, when a Question is tabled my freedom to call hon. Members to ask supplementary questions is unfettered. I try to hold a balance but it is not easy. Hon. Members may become dissatisfied because they are not called. Turning to the Question to which the hon. Member referred, the House, with my permission, had spent a long time on two previous Questions and I moved on quickly because I thought that it was not of such wide interest as apparently it was. It is always a matter of delicate judgment, and I am grateful to the hon. Gentleman for bringing that matter to my notice.

Mr. Jim Spicer: On a point of order, Mr. Speaker. I am sorry that the Foreign Secretary has left the Chamber, but I wish to draw your attention to the fact that in answering Question No. 1 the right hon. Gentleman made a major statement about breaking off diplomatic relations with Uganda. May I ask you, Mr. Speaker, and also the Leader of the House, to ensure that in future an important matter of that kind should he dealt with by means of a statement rather than in reply to a parliamentary Question?

Mr. Speaker: The Leader of the House will have heard that comment.

Mr. Arthur Lewis: On a point of order, Mr. Speaker. May I ask you to go a little further than you did in your reply to my hon. Friend the Member for Keighley (Mr. Cryer)? When a Minister says that a matter is out of order or that it is not in the public interest for him to reply, or whatever it may be, my hon. Friend seeks an assurance that it is up to you to decide whether you will allow supplementary questions. Is it not the case that the fact that a matter is being dealt with by a Minister, whoever he may be, from the Prime Minister downwards, does not preclude you from allowing any Member to ask a supplementary question? Is it not for you to decide?

Mr. Speaker: The hon. Gentleman gave me good advice last week when he said that I should not rush to answer a question off the cuff. I would point out that so long as matters are in order, and if the question asked is a proper one, the discretion is with the Chair. I can say no more on that matter.

BRITISH RAIL SERVICES

Mr. Raphael Tuck: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the report today that British Rail has foreshadowed a reduction in railway passenger routes by 2,500 miles, a reduction of manpower

from 190,000 to 150,000, and a further doubling of commuter fares in London, with the possible loss of 60,000 commuters.
The matter is specific because it affects the lives of everybody. You may recall, Mr. Speaker, that disquiet was recently expressed in the House about certain reports and that fears were set at rest because the Secretary of State for the Environment described those reports as "codswallop".
I believe that the matters should have urgent consideration because, if the arteries through which the lifeblood of a nation flows are closed, that nation will die.

Mr. Speaker: The hon. Member for Watford (Mr. Tuck) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely
the report today that British Rail has foreshadowed a reduction in railway passenger routes by 2,500 miles, a reduction of manpower from 190,000 to 150,000, and a further doubling of commuter fares in London, with the possible loss of 60,000 commuters.
As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the Order but to give no reasons for my decision.
I have given careful consideration to the representations made by the hon. Gentleman, but I must rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

RAIL TRANSPORT OF PIGEONS

3.57 p.m.

Dr. Edmund Marshall: I beg to move,
That leave be given to bring in a Bill to require the British Railways Board to continue to accept unaccompanied racing pigeons for freight carriage.

Hon. Members: Hear, hear.

Dr. Marshall: I am overwhelmed by the popularity of this subject. I suspect that hon. Members in all parts of the House have reecived representations on this important matter from pigeon fanciers in their constituencies.
This matter has arisen because of British Rail's proposal to end the freight carriage of pigeons as well as of most other livestock—a proposal that was due to come into force on 1st July 1976. As a result of pressure that was brought to bear on British Rail and on my right hon. Friend the Secretary of State for the Environment about this problem, British Rail agreed to defer the date when the proposed ban would come into force and to await further discussion of the subject by the Central Transport Consultative Committee. It so happens that that committee is meeting this very day to discuss the matter. Therefore, it is appropriate that the House should be considering the matter at the same time.
The facility to send unaccompanied racing pigeons by rail is indispensable for the activities of nearly all pigeon fanciers. Although most of the large clubs of fanciers have elaborate road transport arrangements for sending their birds to participate in the main races, there are other small clubs in remote areas that still find it more convenient and economical to send their few baskets of birds by rail. Similarly, there are mid-week racing clubs that do not have road transport facilities available away from weekends and therefore have to use rail freight. Individual pigeon fanciers who are not organised in clubs—and this includes many schoolboys—also rely on rail to send off their birds. Moreover, pigeon fanciers of all categories use the railways to dispatch their birds for short training flights and for exchange transactions with other pigeon fanciers in

response to advertisements in the specialist magazines.
Equally important, rail is the only means of sending home pigeons that go astray in flight, particularly many young birds sent off for the first time for their first long journey. People who find these lost birds are able to report them to the nearest pigeon racing club, which will be able to identify the owner of the bird and return it to him by using the railways. There is no alternative to rail transport for the return of these lost pigeons.
Furthermore, an essential feature of the sport of pigeon fancying is the series of large shows, usually held in the winter months, to which the individual exhibitor generally sends his bird or birds by rail and from which in many instances he personally collects them afterwards. These shows are held at major centres of population, including Doncaster, in my area. From the proceeds of these shows, donations are made to the funds of nationwide charities. In the last four years the Royal Pigeon Racing Association has donated a sum of £19,000 to the Association for Spina Bifida and Hydrocephalus. Without rail transport of unaccompanied pigeons, these shows and similar charity auctions could not continue.
Why on earth has British Rail proposed its ban? At first we were told by senior officials of the Board that the ban was necessary in order to comply with the Transit of Animals (General) Order 1973.

Mr. Kenneth Lewis: Tell us what is in the Bill.

Dr. Marshall: This is part of what is in the Bill. That Order places on the carriers of all livestock legal responsibilities which cannot be transferred to the owners. But upon investigation it turned out that the Order necessitates no ban on this traffic. In relation to pigeons, the operative Order is still the Transit of Poultry Order 1919.

Mr. Speaker: Order. The hon. Member for Rutland and Stamford (Mr. Lewis), who called out "Tell us what is in the Bill", was quite in harmony, in so doing, with what I said yesterday to the hon. Member for Liverpool Wavertree (Mr. Steen). The hon.


Member for Goole (Dr. Marshall) must use his 10 minutes to tell us what he is proposing, or why the House should let him have the Bill.

Dr. Marshall: I accept what you say, Mr. Speaker, but it seems to me that the remarks I am making are part of the reason that a Bill of this nature is necessary. Perhaps you will rule me out of order, Mr. Speaker, if I am wrong, bit I insist that all this background is necessary in showing why I wish to seek leave to bring in the Bill I shall try to use the remainder of my 10 minutes as expeditiously as I can.
It seems to me that the Order under which the freight transport of racing pigeons has been carried out for 57 years, namely the Transit of Poultry Order 1919, is therefore something with which British Railways are quite happy, and to which they cannot object at this time or which they cannot use as an excuse for the ban they are proposing.
It may be that British Rail is looking at this more in commercial terms, although it has emerged from the inquiries which have been made that the revenue arising to British Rail as a result of this traffic is annually £150,000. That is something on the positive side, and I cannot imagine what sudden savings would be made by British Rail if this traffic were no longer to be accepted.
All told, I am left with the impression that British Rail quite simply does not wish to be bothered with this traditional traffic any longer. Its attitude is part of the contraction syndrome which at present seems to dominate so much of its thinking. By contrast, I believe that many railway men up and down the country take great pleasure in handling the transit of pigeons.
On behalf of pigeon fanciers throughout the country, I seek this opportunity to place an obligation on British Rail to continue this traffic.

Question put and agreed to.

Bill ordered to be brought in by Dr. Edmund Marshall, Mr. Norman Buchan, Mr. Robin F. Cook, Mr. Robin Corbett, Mr. Stan Crowther, Mr. Bob Cryer, Mr. Bruce George, Mr. Cledwyn Hughes, Mr. Roderick MacFarquhar, Mr. Mike Noble Mr. George Park, and Mr. Neville Sandelson.

RAIL TRANSIT OF PIGEONS

Dr. Edmund Marshall accordingly presented a Bill to require the British Railways Board to continue to accept unaccompanied racing pigeons for freight carriage; and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed.[Bill 218.]

Orders of the Day — AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL

[2ND ALLOTTED DAY]

As amended (in the Standing Committee and on re-committal), further considered.

4.3 p.m.

Mr. Michael McNair-Wilson: On a point of order, Mr. Speaker. Have the Government informed you whether there will be any chance of further time being allotted to debate the amendments about Harland and Wolff or whether they will honour their pledge to me last Friday and at least make a statement about the yard before the House goes into recess?

Mr. Speaker: Mr. Kaufman.

The Minister of State, Department of Industry (Mr. Gerald Kaufman): I had discussions last night with a number of hon. Members from Ulster, and I suggested ways in which the matter could be discussed before the Summer Recess. Those are being examined, and we shall certainly look at this sympathetically from the point of view of the proposal that I made.

Clause 2

GENERAL DUTIES OF THE CORPORATIONS

Mr. Dafydd Wigley: I beg to move Amendment No. 225, in page 3, line 44, leave out 'repair and maintenance'.

Mr. Speaker: With this we may take the following amendments:
No. 258, in Schedule 2, page 75, leave out lines 19 to 26.
No. 247, in page 75, leave out line 20.
No. 259, in page 75, leave out lines 28 to 30.
No. 249, in page 77, line 4, leave out '£3·4 million' and insert:
'£2·5 million in any city or town.'.
No. 219, in page 77, line 4, at end insert 'and
(d) on 21st November 1975 the number of persons employed by that company in any city or town engaged exclusively in

the business of repairing, refitting, converting or maintaining ships exceeded 300, provided that the company is not a member of the same group of companies as a shipbuilding company falling within the description in paragraph 2 above'.
No. 260, in page 77, line 4, at end insert 'and—
(d) on 21st May 1976 the number of persons employed by that company totalled 341':

Mr. Wigley: I am not a member of the Committee which dealt with the Bill, and therefore in giving some of the background to our reasoning, Mr. Speaker, I hope that you will permit me a little latitude in explaining our feelings on the matter.
The amendment is specifically geared to cut out the nationalisation of ship repairing by removing the words "repair and maintenance" from the Bill. I accept that this was discussed to some extent in Committee, although all the arguments relative to the case for such an amendment were not deployed, and certainly the answers were not forthcoming to the points raised in Committee.
Our attitude towards nationalisation does not bear the characteristics of the attitude of Government Members, who may have a blinkered view of nationalisation, believing in nationalising everything. Our view is not, either, that of Conservative Members, who would not nationalise anything, whatever the circumstances might be.
Our attitude is that it depends very much on the industry and the circumstances. In some industries, nationalisation may have worked out quite well. I have in mind the electricity industry, and also broadcasting, where I believe the nationalised corporations are effective. But in other industries the history has been less happy.
In Wales, we have lost almost 150,000 jobs since the War in nationalised industries. Coal pits closed at a rate of knots, one every six weeks, between 1964 and 1970. The steel industry is in a state of chaos at the moment, because there have been no decisions about its future. That will have a serious effect on the employment prospects in the industry. The omnibus industry has had a disastrous record of remote control, leading to ineffective services and the closure of services. The railways have lost some 60 per cent. of the track mileage which was in


existence when they were taken into public ownership.
State ownership and nationalisation, therefore, has not meant job security in these industries. It has not meant better planning and co-ordination—very often the argument put forward in its favour. It has not meant, in some of these industries, the level of higher investment that is necessary to ensure their successful future. Perhaps even more important, it has not led to these industries being run in a more democratic manner.
We have seen the replacement of distant, faceless capitalists by distant, faceless bureaucrats. We have had a centralisation of control, and no real progress towards worker control in these industries.
Our objective as a party is to see worker control, not by paying lip-service to industrial democracy but by moving to at least 51 per cent. worker control in the environment in which these industries exist.

Mr. Doug Hoyle: I am grateful to the hon. Member for giving way. He has referred to the basic industries, particularly in Wales—coal, steel and railways. He has referred to the number of redundancies. If these industries had not been taken into public ownership, where would they be today? Does the hon. Gentleman think that they would have any future at all under private enterprise, which had neglected them and put no investment into them? Will he agree that at least the workers now know where they stand?

Mr. Wigley: The workers in Wales know particularly well where they stand, particularly in regard to the railway industry. According to a report in the Western Mail this morning, Richard Marsh said that if it were not for the nationalist pressure in Wales, the lines would have been closed entirely.
The doubts we have about the Bill are the reasons I have outlined. The Bill is very much a parson's egg of a Bill. There are three different industries covered in one Bill, and the case is very different from industry to industry. I can recognise a certain logic in the need for long-term planning in the aircraft industry, for instance. It is possible that it is difficult to get that planning in the private sector. But that argument is not valid in the case

of the ship repairing, with which the amendment deals. There is no guarantee of jobs, and the Government accept that it is not possible to give such a guarantee.
As to the ship repairing industry, there is no coherent justification for including this industry in the Bill. It is an industry that is service-based and needs quick response time and completion of orders in a highly competitive international market. Those are not the characteristics of the corporations that have been taken into public ownership since the war. The ship repairing industry needs a highly-tuned sales and marketing performance. That has not been a characteristic of nationalised industries. The ship repairing industry is not part of a fully-integrated shipbuilding industry. There is an overlap, but some parts are totally exclusive one from the other.

Mr. Neil Kinnock: I am sure that for the best possible reasons the hon. Gentleman has a wrong impression of nationalisation of the ship repairing industry. It is not that the virtuous characteristics of flexibility and market orientation are absent from nationalisation. They were absent from those industries which were nationalised. As a taxpayer the hon. Gentleman should welcome the fact that where there is virility in some companies, that will be an enormous asset under nationalisation.

Mr. Wigley: I take that point. It is a serious point. There is a possibility that the virility that exists in some companies now will be lost when they are taken into public ownership, as a result of the inevitable bureaucratic control that is a characteristic of the nationalised industries.
I cite the example of the nationalised bus industry. The people in my area have seen what happened. No doubt the same process has occurred in England and Scotland.

Mr. Michael Heseltine: The executives of Bristol Channel Ship Repairers Limited made it clear that they would not work for the State bureaucracy.

Mr. Wigley: I do not know what the members of that company said to the hon. Members. Even if they stay in their present jobs, they will be tied down by bureaucratic controls. That is the nature of the animal with which we are dealing.


It is inevitable. The Government have made no case for the nationalisation of this industry.
I have been through the reports of the Committee stage of the Bill with a toothcomb. I have yet to see the case made. I followed the arguments put forward by the hon. Member for Colne Valley (Mr, Wainwright) and the hon. Member for Glasgow, Cathcart (Mr. Taylor). Their arguments were not answered. The hon Member for Colne Valley underlined the fact that we were dealing with different, small-scale, service industries. He said there were different methods of finding work for the ship repairing and shipbuilding industries. The need to respond quickly in emergency situations was pointed out. The high export content of this industry is important. There is a need for long-term planning.
The hon. Member for Colne Valley said that this was a new departure in nationalisation and that it held out a threat. If nationalisation is moving in the direction of service industries we may well see garages and corner shops coming under the same scrutiny as the type of industry that may employ only 30 or 40 people in one location.
Overseas shipowners may well not want to use companies forming part of the United Kingdom nationalised industry when they know that features incorporated into their ships built elsewhere may be picked up at the repair stage and used by manufacturers in the United Kingdom. As a result of that we may lose business. Other equally valid points were put forward.

Mr. John Evans: The hon. Gentleman suggested that the two industries were distinct. I hope to disprove that point later. The hon. Gentleman made the point that foreign owners may not wish to place their ships for repairs in British nationalised ship repairing companies as the owners will pick up and use the ideas incorporated in the foreign-built ships. Does not the hon. Gentleman appreciate that the majority of British ship repairing companies are already part of British shipbuilding companies such as Swan Hunter, Court Line, Vosper, Cammell Laird and Harland and Wolff? Will he recognise that point before going any further?

4.15 p.m.

Mr. Wigley: I recognise that point. An Answer I received to a Parliamentary Question yesterday showed that the turnover of the industry was £150 million. Of that sum £30 million came from overseas business. Bristol Channel Ship Repairers Ltd., the only ship repair company in Wales, accounted for about one-quarter of that export content. I contend that there is a real danger. It was expressed in Committee by a number of hon. Members.
The hon. Member for Cathcart put forward an equally valid point. There is no need for special aid for this sector in the way in which there may be a case for aid for the shipbuilding industry. Nor is there a need for restructuring, which has started, in view of changes in the world situation from 1968 onwards.
In Committee the Minister, in reply, covered a number of points. I should like to answer those points, as I do not believe that he gave satisfactory answers. Chronologically, his first reason— I do not know whether it came first in his list of priorities—was that this commitment was contained in the Labour Party manifesto. We recognise that there are some commitments in that manifesto with which some members of the Opposition agree, such as child benefit or the provision of economic planning in Wales, but these are not being honoured.
The Minister said that there was a natural affinity between ship repairing and shipbuilding. That natural affinity is not evident in the case of the 70 companies not being nationalised under the Bill. The Minister said that if there were not full cover of the nationalisation of the ship repairing industry there would be a rough and ready frontier through the heart of the ship repairing industry. Surely that rough and ready frontier exists already. A line is being drawn between the companies covered by the Bill and those that are excluded.
The Minister drew heavily from the PA consultants' report on the ship repairing industry. He said that several ship repairers existed on one estuary and that in consequence there was a tendency for them to compete against each other. That situation will continue


Let us take the case of the Severn Estuary. The ship repairing company of Bristol Channel Ship Repairers will be nationalised. Jefferies of Avonmouth will not be nationalised. The firms will compete with each other. That does not change the situation.
The Minister underlined the fact that the consultants' report referred to outdated facilities. Why has not the National Enterprise Board got "stuck in" with its powers under the Industry Act? The report referred to unsatisfactory labour relations. That does not hold water when we compare the hideous labour relations in the nationalised steel industry in Llanwern with the fact that Bristol Channel Ship Repairers Limited has not lost time or production as a result of labour difficulties over the past eight years.
The Minister referred to the possibility of losses of jobs. He said that 2,000 or 3,000 jobs might be lost in the ship repairing industry by 1980 if it were not nationalised. But if those jobs are to be saved, from where is the additional business to come? Do the Government believe that they will be able to make inroads into international competition, in present circumstances, through a State corporation, to pick up 2,000 or 3,000 extra jobs?
How does that tie up with the other point that there is a need for increased productivity? Increased productivity in a frozen market situation will lead to a decrease in the number of people employed. The productivity of a company such as the Bristol Channel Ship Repairers is three times higher than that of Jefferies of Avonmouth, which is excluded from this Bill. Productivity has clearly not been an important point in deciding which companies are to be included in the schedule.
The Minister referred to the need for a coherent strategy for ship repair yards. How is it possible to arrive at a coherent strategy when the international market is volatile and on short lead time? The argument that may be valid for the shipbuilding and aircraft construction industries is not valid in the case of the ship repairing industry.
The Minister pointed to the need for a ship repairing facility on every major estuary. He said that no large ship repair-

ing company located on such an estuary was omitted. In fact, major companies have been omitted. Jefferies of Avonmouth employs twice as many people as Bristol Channel Ship Repairers, yet Jefferies has been omitted from the Bill. The Minister was unable to put forward a coherent case on that point.
A case has not been made for the nationalisation of the ship repairing industry. On the contrary, an overwhelming case has been made against the exclusion of this industry from the Bill.
I should like to move on quickly to the specific case of the only ship repairing company located in Wales which is included in the Bill—Bristol Channel Ship Repairers. That company has drawn a certain amount of hostility and attention to itself because of the campaign that it has waged over recent weeks, months and even years. That company represents only 0·4 per cent. of the total labour force of the companies which are under threat of nationalisation—380 out of 91,000 employees. That company has the smallest number of employees of any of the companies mentioned. Those employees are not on one site. They are scattered among six different yards over 70 miles of coastline. Indeed, at Newport only 35 men are employed. How can we argue that these are the commanding heights of the economy that need to be taken into public ownership?

Mr. Bob Cryer: The hon. Gentleman said that Bristol Channel Ship Repairers Limited employed 300 people. Will he explain the difference between the figure given in the annual report for the year ended March 1975, which was 821, and for the previous year—800?

Mr. Wigley: The 800 represents a group figure. I think that the figure given in that report for ship repairing was 380. I think that the hon. Gentleman will find that that is so if he checks it.
Bristol Channel Ship Repairers Limited is not a shipbuilding company. It is situated on an estuary where there is no shipbuilding to be nationalised.

Mr. Roy Hughes: The hon. Gentleman is dealing partly with my constituency. Following the point made by my hon. Friend the Member for Keighley (Mr. Cryer), I was wondering whether the distortion in the figures had anything to


do with the recent redundancies at that company when consultations, and so on, went by the board.

Mr. Wigley: It is fair that the hon. Gentleman, who has a constituency interest in this company, should raise that matter. I acknowledge that there were redundancies of about two dozen people in that company this year. That was the result of world-wide pressures. Some would argue that it was the result of uncertainty because the Bill is going through, but that is another matter.
I move on now to the profitability of Bristol Channel Ship Repairers Limited. It is a highly profitable company but it has retained the profits to build itself up by increasing investment and facilities for the work force. Only 10 per cent. of the profits in the last financial year went in dividends. That was £122,000 out of £1·2 million profits. Indeed, the return on shares was 2 per cent. That is hardly the description of a company using its profits in a socially unacceptable way.
The company's relations with its work force is magnificent. It has not lost any production due to industrial disputes for over eight years. Over the last few years the company has undertaken far-reaching experiments in industrial democracy. That is something that other companies, whether in the private or public sector, have not done. There is one worker-director for every 50 employees, 90 per cent. of whom are shareholders within the company. About 20 per cent. of the control of the company now lies in the hands of the employees. The programme is for that to be built up to a 51 per cent. stake, which will then make it a worker-controlled company. A profit-sharing scheme for employees is also being introduced.

Mr. Hoyle: The hon. Gentleman seems to have a great deal of detailed knowledge about Bristol Channel Ship Repairers Limited. In view of his detailed knowledge, will he tell me how much has been spent on advertisements against nationalisation and on lunches and dinners at this House?

Mr. Wigley: I am sure that a considerable amount has been spent on the campaign against nationalisation, because the company honestly believes and is convinced—I accept its arguments—that the

future for its employees will be bleak if it is nationalised.
The hon. Gentleman asked how much money had been spent on lunches. Perhaps he would care to tell the House that he had lunch provided by that company. Indeed, he went back a second time to find out exactly what the situation was regarding that company. [Interruption.] I missed that last point. I am sure that the hon. Gentleman was merely confirming what I said.
The hon. Gentleman raised some matters in the debate yesterday relative to this company and they should be answered. One point was that the company was against trade unions. In fact, 100 per cent. of the company's shoo floor employees are members of trade unions —the Transport and General Workers Union, the AUEW and the boilermakers union. Company policy is to encourage its employees to be members of trade unions. The majority of supervisors are also members of trade unions. Some managers—for instance, both managers at Newport—are members of trade unions.
The company invited ASTMS, the union in which the hon. Member for Nelson and Colne (Mr. Hoyle) has an interest, to send a local representative to its quarterly conference. I hope that he will go, although he failed to go to the last meeting. A similar invitation has been extended to a representative of APEX. Therefore, this company cannot be projected as being hostile to trade unionism.

Mr. Hoyle: The hon. Gentleman seems to have detailed knowledge, apart from what the company has spent on the promotion of its anti-nationalisation campaign. He is saying that the company encouraged—

Mr. Barnaby Drayson: Put a question.

Mr. Hoyle: If the hon. Gentleman wants to make a point, he should stand up. If he will listen, he will hear the question. I hope that he will not be so impatient. The hon. Gentleman is not often here.

Mr. Deputy Speaker (Mr. Oscar Murton): Order. I must remind the hon. Gentleman that the Chair takes a considerable interest in what goes on in this


Chamber. I should be grateful if he would address his remarks to the Chair and not have too much cross-talk below the Gangway.

Mr. Hoyle: I shall certainly address my remarks to you, Mr. Deputy Speaker. I apologise. I am surprised to see the hon. Member for Skipton (Mr. Drayson) in this Chamber. After all, he is not often with us. If he will be patient, I shall come to the question. Of course, I am always delighted to see and exchange words with the hon. Gentleman.
The remarks made by the hon. Member for Caernarvon (Mr. Wigley) relating to the white collar staff union do not seem to be in line with what I have heard. I do not know of any invitation to ASTMS to send a representative to the company, but I am sure that it will be delighted to send someone along. I have had conversations with the white collar staff employed by Bristol Channel Ship Repairers Limited. They have said that they are afraid to join a trade union for fear of what might happen to them.

Mr. Wigley: I am sure that those fears although perhaps genuinely expressed to the hon. Gentleman, were without foundation. The invitation was given to Mr. Clive Jenkins, the general secretary of the union. The hon. Gentleman can no doubt check that with Mr. Jenkins.
I turn now to the attitude of the employees of Bristol Channel Repairers Limited towards nationalisation. They do not want nationalisation. Yesterday light play was made of the fact that there was a high turn-out in the ballot held by the company. I should have thought that hon. Members on both sides would welcome that procedure. If there is a feeling that the ballot within the company is non-representative, why do not the Government accept Amendment No. 314, which provides for a referendum of employees in all the companies to be nationalised if 10 per cent. of employees request one? That is a reasonable proposal which is fully in line with the concept of industrial democracy if that is to mean anything and is not to be a farce, a skin-thin commitment to worker control, or anything of that kind.
The employees of Bristol Channel Ship Repairers Limited are of the opinion that they are doing well without being

nationalised. They feel that the company will do much better if only the Government will get off their backs. They are certain that they will lose customers if the company is nationalised.
There is good reason for their apprehension. I should like to quote from a letter from one of the company's customers, Holter-Sorensen and Company, which wrote on 18th March last year saying:
with our experience with nationalised companies, we must regret to announce that, in the event of nationalisation of your firm, we shall no longer be interested in making use of your docking and repair facilities.
That is the reality of the situation. About 70 per cent. of the company's business comes from overseas companies which will probably take the same attitude.

Mr. Ron Thomas: I seem to recall the hon. Gentleman rightly making the point that, due to all the pro-Market propaganda which went around, it was not unexpected that people should have voted in such a way. Will he direct his mind to the possibility that this vast amount of money spent by the company may have created a sense of fear amongst its employees and that that is why they voted as they did?

Mr. Wigley: That is why we have tabled an amendment which would provide for an independent referendum to be taken by, for example, the Hansard Society. That would provide the opportunity for the Government to find out the opinions of the employees. It would not interfere with the type of situation to which the hon. Gentleman refers.
4.30 p.m.
Employees have another fear, that in a nationalised situation work could be transferred from the Bristol Channel yard to yards in the nationalised industry which do not have the same facilities for drawing in work. This is a genuine fear of something which could well take place if lame duck yards are given the benefit of the hard work which Bristol Channel company has done in building up markets by its sales efforts.
Hon. Members opposite may have a point in saying that the public relations campaign which has been undertaken may prove to have been counter-productive, but that is no good reason for including the company in this Bill when all


common sense suggests that the company should not be included. We know that the energy of Christopher Bailey and his associates would be far better spent looking for orders abroad than in having to fight this kind of campaign. The way of ensuring that is for the Government to leave this company out of the Bill and to let him get on with his job.
If every industrialist in the nationalised and non-nationalised sector showed as much fight as this company has shown on this issue, the situation in British industry would be very much better. There are hon. Members of all parties who have great sympathy with the situation of the Bristol Channel Company. As we know, there are hon. Members opposite who put down amendments to the same effect as ours. Hon. Members had an amendment on the Order Paper when this debate should have taken place a month or six weeks ago but they are not there now. They have been whipped out, and the hon. Members concerned have been turned into Lobby fodder of the party opposite.
The case in favour of excluding ship repairing and specifically excluding Bristol Channel Ship Repairers is overwhelming. It is known in the yards and by hon. Members opposite as well as by others outside. I hope that when the vote comes they will show by their vote what they know in their hearts.

Mr. Roy Hughes: I confess to a little admiration for the idealism of the Welsh National Party. It is perhaps symbolised in this amendment and in remarks by the hon. Member for Caernarvon (Mr. Wigley). He has said that in principle he is not against the extension of public ownership but that he very much resents the bureaucracy that goes with it. We have some common ground there. But, bearing in mind the idealism of the Welsh National Party, it is difficult for me to understand how those hon. Members have come to be caught up in this sordid campaign of the Bristol Channel Ship Repairers.
No one would wish to deny this firm the right to put its case, but it has certainly bordered on the realms of impropriety. I believe that it has been subject to certain investigations, and that has cost a fortune. If the object has been to prevent the firm being taken into public

ownership. I would say that the campaign is having altogether the very opposite effect.

Mr. Heseltine: I am sure that the hon. Member realises that he speaks with the privilege that the House confers upon him. He is making extremeley serious allegations the implications of which could be construed in a way which I very much hope he does not intend. So that the headlines do not carry an impression that he would not want, I hope that he will be careful in explaining exactly what he means by those remarks.

Mr. Hughes: I do not propose to enlarge on my remarks in any way whatsoever in answer to the hon. Gentleman, but certainly hon. Members on this side of the House will be aware of the correctness of my very careful remarks.

Mr. Heseltine: On a point of order, Mr. Deputy Speaker. The hon. Member for Newport (Mr. Hughes) has used words that could be interpreted as implying that the conduct of this company was beyond the law. He said that investigations had been considered. I have asked him to make quite clear what he has in mind so that that kind of implication should not be carried in tomorrow's Press. It is extremely serious. The reputation of the company in a situation in which it has no defence should not be impugned in the House of Commons.

Mr. Deputy Speaker: Any hon. Member carries responsibility for any remark he may make in this place, or for any views he may express, subject to the rules of order. It is entirely up to the hon. Member.

Mr. Kenneth Lewis (Rutland and Stamford): Further to that point of order Mr. Deputy Speaker. The hon. Member for Newport (Mr. Hughes) used the word "impropriety" in connection with this campaign. It is very easy for hon. Members to use such terms when a campaign is successful, but it is not a term that should be used within the privilege of the House.

Mr. Deputy Speaker: The hon. Member must be allowed to speak for himself. This is not a point of order.

Mr. Hughes: I have made my point perfectly clearly and I am sure that that will be borne out by the Official Report tomorrow morning. I want to make clear


that the campaign of this company has certainly hardened the attitude of Ministers. It has certainly closed the ranks of the Parliamentary Labour Party.
I would say to those workers who have got caught up in this campaign that their proper channel is through their respective trade unions and they should not act as tame poodles of the company. It is worth reminding the House that we got rid of Spencerism in South Wales 40 years ago. The consultation and worker participation allegedly practised by this company were not exactly to the forefront when we had redundancies in this firm only months ago, as trade unionists and trade union officers who dealt with the situation in this company will very readily bear out.
I should have thought that the huge sum of money spent on this campaign would have been better given to those poor people who were made redundant and whose families have been badly affected as a result. Personally, I would not myself claim Baileys as a good employer. From listening to the hon. Member for Caernarvon one would have thought the company was the natural successor to Robert Owen in Wales, but we are nearer to the scene in South Wales and know the situation rather better, to say the least. Having made these comments on the campaign of this company, I must say I can understand the attitude of certain employees, some of them constituents of mine, who have approached me on the subject of public ownership.

Mr. Michael Grylls: May I put a question to the hon. Member very mildly? If he is going home one evening and is attacked by robbers, is it wrong for him to defend himself? This is precisely what this company has been doing in this campaign—defending itself against nationalisation. Is that so immoral? Is it sordid?

Mr. Hughes: I have already dealt with the campaign and I wish to get on.
This firm has operated in various forms in Newport over a long period and it is worth pointing out—and I say this against my own case—that Newport has had rather a sad experience of public ownership. It is essentially very

much a steel town. We have experienced the closure of our tube works when 1,500 jobs were lost. Many products were later imported. Chaos has been created at the Llanwern works, perhaps the most modern in the country. The British Steel Corporation has nearly bankrupted our docks by taking away the iron ore trade, and it is time that the Government did something to rectify the situation there.
The misgivings of the employees of Bristol Channel Ship Repairers centre around the fact that ship repairing tends to be concentrated in the North-East of England. With nationalisation, there is a suspicion that there might be rationalisation and that the Welsh enterprise could be sacrificed. That is why I welcome Government Amendment No. 320, which provides for the decentralisation of management and decision-taking and the creation of so-called profit centres. In this sense, the Government have answered the criticisms in the amendment moved by the hon. Member for Caernarvon. Under this arrangement, there is no reason why the South Wales enterprise should not continue successfully.
Publicly-owned industries need to be far more accountable. Here I am on common ground again with the hon. Member for Caernarvon. It was over two years after nationalisation that we had a debate on the steel industry and only then because of the Iron and Steel Act and because Parliament had to authorise vast sums of money to help that vital industry.
The late Mr. Aneurin Bevan always argued for greater accountability to the House by the publicly owned industries. He was absolutely right. We do not want the same sort of practices in these new enterprises as have happened in steel in recent years. It seems as though the rival bureaucracies in the Department of Industry and the BSC argue about the industry's future while the work people are merely minions in the power game.
Work people, through their trade unions, must have a far greater say in these new industries which are to be taken into public ownership. We must not have the sham arrangement that we have had with steel. I welcome the new proposals for the mining industry and I hope that we can get that sort of proposal in other publicly owned industries.
Having made those criticisms, and despite any misgivings I may have, I remain as convinced as ever that public ownership is the right answer for the aircraft and shipbuilding industries.

4.45 p.m.

Mr. Heseltine: This debate exists on a number of levels. I am sorry that the hon. Member for Newport (Mr. Hughes) has lowered its tone in a way which I find totally regrettable. Perhaps one might try to clarify the position. Any company—any member of the British public—has the right to use its legal resources to present its case to this House and to a wider British public and to exercise any legitimate pressure that it can therefore bring to bear in furtherance of its democratic rights. That must be the basis of our democratic faith.
Bristol Channel Ship Repairers has undoubtedly done just that with a flair and a skill which has drawn attention to its case very widely. Hon. Members opposite obviously do not like the case—I do not blame them for that, because it is against their own convictions and philosophy—but it must still be attractive to them as an idea that the right of this company to put a case is fundamental.
The hon. Member for Newport—I regret that he did not find it possible to clarify what he had in mind—suggested that in some way the techniques used by that company were improper, were subject to an investigation, in some way in fringed the law, in some way misused the company's funds. Those were the implications of his remarks.
I should have thought that the only fair thing for the hon. Member to do was to repeat those remarks outside the House. We should then be able to watch the consequences, since the company would have the right to defend itself in the courts. Otherwise, anyone who challenges the views of the Labour Party is likely to find that the Labour Party's defence is to indulge in smear tactics in the House, tactics against which there is no defence.
I intervened in the hon. Member's speech to enable him to clarify what could have been—I say this at once—a perfectly legitimate expression. We all know how, speaking extempore from half-prepared notes, one can use words that do

not 100 per cent. reflect what one would have said with a prepared text.

Mr. Roy Hughes: Read Hansard tomorrow morning.

Mr. Heseltine: I heard what the hon. Gentleman said, and I cannot see why it is necessary to wait for tomorrow morning. Why is it not possible for him to clarify what he meant? Then the damage need never be done. By tomorrow morning, when, in the absence of clarification, the implications and the doubts will remain, the damage will have been done.
The hon. Member is being less than fair to those who work for that company, to those who own it and to the wider public, if he does not explain precisely what he meant by his words. He must recognise that in pursuit of this debate, which is very controversial and in which deep convictions are held by all hon. Members, it does no one any good to use techniques which are perhaps less straightforward than we would expect.

Mr. Ioan Evans: Mr. Ioan Evans (Aberdare) rose—

Mr. Heseltine: No—I will give way to the hon. Member for Newport.

Mr. Evans: On this point.

Hon. Members: Give way.

Mr. Heseltine: Hon. Members know that I give way as frequently as anyone in the House. I have made a direct reply to the speech of the hon. Member for Newport. I will willingly give way to him so that he can clarify the position.

Mr. Tom King: He is not going to budge.

Mr. Heseltine: It is totally regrettable that the hon. Member is going to do nothing—

Mr. Ioan Evans: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Henley (Mr. Heseltine), who was recently found swinging the Mace, to lecture this side of the House on law and order?

Mr. Deputy Speaker: That is not a matter of order. It is an irrelevancy.

Mr. Heseltine: I am grateful for your view, Mr. Deputy Speaker, that that point of order is irrelevant—just as it would have been if I had referred to the singing of "The Red Flag" on that occasion. I


have no intention, of course, of referring to the antics of those songsters—antics for which no apology has ever been made in the House.
Perhaps we can look at the case which was so eloquently—

Mr. Andrew Bowden: Would my hon. Friend comment further on the speech of the hon. Member for Newport (Mr. Hughes), which I can only regard as cheap and nasty? He said that those employees of the company who protested against the nationalisation scheme should use only their trade unions as a means of protest. That is an extraordinary view, because employees have every right to contact their Member of Parliament and other Members.

Mr. Heseltine: I am grateful to my hon. Friend. That is very much the point I had in mind. The point which follows from the eloquent speech of the hon. Member for Caernarvon (Mr. Wigley) is that one must ask oneself what the employees of the Bristol Channel Ship Repairers Ltd. are supposed to have done wrong.
Trade union members indulge, quite rightly, in political activities on the shop floor of their company and in their own private time on behalf of all political parties in this country. They may use any legitimate weapon available to communicate their views through the trade union movement to Parliament or to Parliament direct. There is no criticism of a trade union member who comes to Westminster and lobbies Members of Parliament, or who writes letters on a large scale to Members of Parliament. Similarly, there is no criticism of any manager who argues his case in the normal political way.
This being the case, why is Bristol Channel Ship Repairers Ltd. being criticised? It is not a question of what the company has done, but simply the fact that it disagrees with the Labour Party. [HON. MEMBERS: "No."] Oh, yes, that is so.

Mr. Cryer: We on this side of the House do not oppose any company putting its case. Those of us who have criticised Bristol Channel Ship Repairers do so because we object to the methods

of a company employed by it—a firm called International News Service. We criticise the methods that that company employed to present the case, and we believe that the presentation strayed beyond the bounds of reasonableness.

Mr. Heseltine: I think that it is perfectly reasonable for hon. Members to look carefully at all the methods used to draw views to their attention. We must exercise that judgment all the time. There is an obvious sanction available to us: we do not need to accept the invitations made to us, or read the documents sent to us. There are a thousand different ways in which we can rebel against that technique.
If Labour Members had consistently opposed these methods, I should understand their protests, but Labour Members have not refused to look at documents sent to them. Is the hon. Member for Keighley (Mr. Cryer) seriously suggesting that Labour Members have not been involved in what I would call the gravy train of this company? Is he saying Labour Members have been immune to this process? It is within the control of every hon. Member to wield the ultimate sanction. The only reason the company asks hon. Members to be entertained is in the expectation that its representations will be accepted. They were accepted by Labour Members. But we do not have to accept them and Members of the Labour Party could say "No."

Mr. Deputy Speaker: Order. We are going very wide of the amendment. I call the House back to the point of the amendment.

Mr. Heseltine: Of course I accept your ruling Mr. Deputy Speaker, but I take it that there would be a protection for us for the remainder of the debate if this case were raised again.
I move now to the case against including the ship repairing industry in the context of this nationalisation measure. We have all come to the House today with certain knowledge of how the votes will be cast. The result will be wholly predictable at the end of the day. To that extent, this is not a debate at all We do not believe that there is any prospect whatever of any argument being produced from this side of the House that will influence the Labour Party in any way. Labour Members believe in public


ownership. They will look at any complex industrial problem, and every research team they put up to investigate it comes up with the answer of nationalisation.

Mr. John Evans: The hon. Member makes the comment that there is no real debate on this matter. He has been on his feet for 10 minutes, yet he has not talked about the ship repairing industry at all. It might help the debate if he were to do so.

Mr. Heseltine: I am moving to precisely that subject. The important point is that in the debate this afternoon no one expects that a change of mind will result from the argument deployed by the hon. Member for Caernarvon, or any other arguments that could be conceivably deployed by other hon. Members against including ship repairing. I do not expect the Labour Party to accept that. The only additional tactics that could be adopted to further the debate would be to look at the case histories of individual companies or individual estuaries and give a theoretical denunciation of the practical realities of nationalisation in order to counter what has been said.
There is a whole myriad and range of problems facing every industry and every company in this country. It is the essence of the managerial concept that one is continually problem-solving. When one range of problems has been solved, others will take its place. The important question is whether the problems of today will be better solved by nationalisation.
There are a considerable number of companies involved in ship repairing which are short of work, in common with many other industries. Nationalisation will not produce one extra job or find one extra ship in need of repair. It will not divert to British estuaries one single ship which needs work done on it.
Then there is the question of the possibility of providing investment funds. This Government must have come to understand that money for public expenditure has run out. We saw this in last week's announcement by the Chancellor. The nationalisation investment programme was reduced by £150 million on capital account. To suggest that this is the way to raise money for investors in our yards is quite unrealistic.
The forward forecasts for the nationalisation budgets of these two corporations do not foresee any increase in capital expenditure. There is no evidence to suggest that capital expenditure will increase under nationalisation—indeed, the evidence is that it might well be reduced.

5.0 p.m.

Mr. Ron Thomas: We debated this matter in Committee. The White Paper is very vague, talking about "may" and "likely to be" and so on. Therefore, to say that there are specific figures in the White Paper on capital investment in these industries is quite wrong.

Mr. Heseltine: The hon. Member wants to go on believing that sort of thing. It is a political imperative for him to tell his constituents that nationalisation will solve their problems by producing jobs and investments. I hope that he will remember what I have said when the harsh truth dawns and when none of these things has happened because the money has run out.
The difficulty is that the Government Front Bench says the same thing. It has to take actions which result from having said so, but still the lesson does not get home to Labour Back Benchers. Last week the public expenditure programmes of the nationalised industries were cut. But still Labour Members think that there is a pool of money which can be drawn upon next year or the year after. The realities are quite different. The cash has run out.
Every time the Chancellor comes to the House and says he will increase public expenditure, for whatever purpose, including the investment programmes of the nationalised industries, there will be a consequent decline in public confidence. It will be necessary to increase interest rates, which will further prejudice employment in the private sector as well as having already reduced it in the public sector. That is the harsh reality which underlies this legislation. It is therefore unrealistic to suggest that nationalisation offers further investment opportunities.
Labour Back Benchers suggest that nationalisation will prevent unemployment in these industries. To be fair to the Prime Minister and the Secretary of State for Industry, that is not what the


small print says. The reality has been put on the record by the responsible Ministers. Of course unemployment will rise, particularly in the areas where these industries are concentrated. Labour Members might like to give their forecasts of what they think unemployment will be in the North-East and on Clyde-side by the end of the year.

Mr. Ron Thomas: What would it be if the hon. Gentleman's policies were accepted?

Mr. Heseltine: It is the Government's policy to nationalise these industries in the belief that that will avoid unemployment. It will not. The sooner that Labour Members realise that, the sooner they might realise that we should be talking about how to get jobs into these industries, not how to change their ownership. The mere spending of £300 million of taxpayers' money is destroying jobs. It is time that Labour Members realised that and stopped deluding themselves and the employees in the industries.
Nationalisation will divert the nation's attention from the realities of these industries. It stops the dialogue about what we should be doing to help them. It is convenient for Labour Members to indulge in this diversion because it is easier to try to pretend that there is a cosy soft option when in reality as a nation we have run out of resources with which to pay for that option.
My right hon. and hon. Friends will vote for the amendment with the total conviction that our arguments have been victorious throughout the debate. We shall do so with another certainty. It is that if by any chance we are unsuccessful in this debate, and should the legislalation reach the statute book, we intend, on returning to power, that the Bristol Channel Ship Repairers and the other ship repairing companies are returned to the private sector as rapidly as we can do it.

Mr. Kaufman: The hon. Member for Caernarvon (Mr. Wigley) introduced his amendment in the moderate and agreeable way that we expect of him and his colleagues. I do not criticise him for moving it or for the way in which he did so. He has spoken out of conviction, and I hope that by the time I have concluded

my remarks he will feel that his convictions are not as soundly based as he at first thought.
First, I shall deal with the subject of ship repairing in general before coming on to the individual case. Perhaps I should make one preliminary remark. For reasons which I fully understand and which I do not criticise in any way, he has based his remarks upon one individual company. He has said that it is unnecessary to include ship repairing in Wales in the Bill. But before he casts his vote on this amendment he should consider another ship repair company which has implications for Welsh workers and, what is more, Welsh workers who live a good deal nearer to the hon. Member in Caernarvon than do the workers represented by my hon. Friend the Member for Newport (Mr. Hughes) and others of my hon. Friends including my right hon. Friend the Prime Minister.
Has the hon. Gentleman considered what is likely to be the fate of the workers in Western Shiprepairers on Merseyside if the Bill does not embrace ship repairing? Although the total number of workers in that company is roughly the equivalent of the number of workers in the group for which he is speaking today, and although I agree that by no means are all those workers Welsh, he should consider the repercussions of unemployment on Merseyside. That is one of the reasons why the Government took the view they took about the Shotton situation and why they are so anxious to retain the maximum amount of work for the Hawker Siddeley factory in East Flint.

Mr. Gwynfor Evans: The Minister of State speaks of his fears about possible unemployment on Merseyside if the Bill is amended. Does he fear the same thing, for instance, in Avonmouth and in Bristol, where there is a firm not included in the Bill? Is there likely to be unemployment in that firm as a result of its not being nationalised? Why is it necessary to include Bristol Channel Ship Repairers and not to include a firm twice the size on the same estuary?

Mr. Kaufman: I shall of course be coming to these matters in due course. Unlike the Opposition Front Bench, which simply regards any dialogue between us


with cynicism, the hon. Member for Carmarthen (Mr. Evans) will know from our contacts that I endeavour to discuss with him, not always on the basis of agreement, but certainly on the basis of mutual respect. I shall respond to him again on that basis.

Mr. Heseltine: Get on with it.

Mr. Kaufman: I will not be told by the Conservative Party how to arrange my speech. At least I do not seek to create effects in this House by throwing the caber or something of that kind. My hon. Friends bitterly resented the hon. Member for Henley (Mr. Heseltine) having the nerve to lecture my hon. Friend the Member for Newport, with reference to some of the workers involved in the company, on respect for parliamentary institutions.
As for ship repairing in general, I remind the House that we have a specific commitment to nationalise in both our 1974 election manifestos. That is distinct from the commitment applying to shipbuilding. Whereas some hon. Members may feel that we are not carrying out all our manifesto commitments, I hope that they will not criticise us when we do carry them out. In fact, we have carried out a great many.
The ship repairing commitment arose from the report of the joint Labour Party /CSEU/TUC Working Party which was published in 1973 when the Labour Party was in opposition. The joint working party recommended that the proposed corporation should acquire
control of all significant companies in the ship building, ship repair and marine engineering industries.
That recommendation was endorsed by the 1973 annual conference of all three bodies.
The PA Management Consultants Limited report on the industry, which was commissioned by the previous Conservative Government, identified a number of problems that the industry is facing. It identified a number of "obstacles to growth":
the development of an already strong industry on the Continent … the existence in many cases of several ship repairers within one estuary and the consequent tendency for the individual companes to compete against each other instead of concentrating upon meeting overseas competition … outdated facilities of many repairers which will become even

more unsuitable in the longer term as the average size and type of vessel changes … unsatisfactory labour relations and their impact upon international competitveness.
When the hon. Member for Caernarvon understandably refers to what he regards as the satisfactory labour relations record of Bristol Channel Ship Repairers Limited, it is significant that that company chooses a term of years within which to measure its good labour relations. I am sure that the hon. Gentleman will know that between 1967 and 1969 the company had a strike that lasted for two whole years. Those are the labour relations traditions of Bristol Channel Ship Repairers Limited.
The hon. Member also referred to financial assistance. Assistance is likely to be needed to finance essential involvement as sufficient funds are unlikely to be forthcoming from the private sector. In the past 10 years employment in ship repairing, as I have already pointed out, has halved. Without moderisation the industry is likely to decline further.

Mr. Neville Trotter: Mr. Neville Trotter (Tynemouth) rose—

Mr. Kaufman: If the hon. Gentleman will forgive me, I shall not give way. I do not want to take too long with my remarks. No doubt he will have an opportunity of speaking after I have concluded.
Most of the jobs at present provided by the industry are in assisted areas, including Merseyside as well as South Wales. The major aim, therefore, of taking into public ownership the larger ship repairing companies—the hon. Gentleman may say that Bristol Channel Ship Repairers Limited is not one of the larger companies, but, on the other hand, he has said that it is responsible for a quarter of all the exports of the ship repairing industry—is substantially to improve investment and productivity in the industry. Taking into public ownership the larger companies mostly situated on the main estuaries will enable the corporation to produce a coherent strategy for the ship repairing yards as a whole.
There has been some criticism of the scope of public ownership in the ship repairing industry. The hon. Gentleman took up that point. Some hon. Members have argued that individual companies should be exempted from nationalisation


on the grounds that they are small, while other hon. Members have pressed for the inclusion of other even smaller ship repairing companies. I think it will be helpful for me to explain the effect of the Government's proposals as detailed in Schedule 2.
As the PA report pointed out, the most significant ship repairing units are those which are located on the major estuaries in Great Britain—for example, the Tyne, the Mersey, the Thames, the Bristol Channel, the Humber or the lower Clyde. What the Bill seeks to achieve is to bring into public ownership all the large ship repairing companies mostly located on the main estuaries. For these reasons it would be a great mistake if the amendments to delete ship repair were carried. I urge the House to reject them.
5.15 p.m.
As I have said, the public ownership proposals set out in the Bill embrace all the large ship repairing groups on major estuaries in Great Britain—for example, the Tyne, the Humber, the Mersey and, by no means least, the Bristol Channel. We believe it right for the purposes of giving British Shipbuilders an adequate industrial base for planning a better future for the ship repairing industry for the large estuarial companies to come into public ownership. The definitions in Schedule 2 were drawn up to achieve this result. The fact that some companies are not in shipbuilding groups is not a relevant consideration. I remind the House that our manifesto commitment to nationalisation refers to ship repair as well as shipbuilding.
In terms of the number of dry docks operated, Bristol Channel Ship Repairers Limited is the second most significant company in the list in the Bill. It operates eight dry docks along the South Wales coast. Its annual turnover in the period relevant to the definition was over £1 million above the cut-off. In terms of turnover, several other listed companies are smaller.

Mr. Albert Roberts: I believe in "one in, all in" when dealing with nationalisation. I point out to my hon. Friend that on nationalising the mines we gave licences to small mines that allowed the owners to work under the private enterprise system provided that

they employed no more than 30 people. Has my hon. Friend given consideration to that point? I believe it is an important matter that should be considered in terms of the main areas of ship repairing. However, there are places where repairing is nothing more than a scratching shed. If it is possible, to give some relief, it should be done.

Mr. Kaufman: My hon. Friend has long experience of the mining industry and understandably draws upon it in considering these matters. We have considered a number of proposals for this company and we have arrived at the one that has been put before the House. One of the reasons for coming forward with the proposal is that we do not believe—I know of my hon. Friend's long advocacy for public ownership of the coal-mining industry and that he will accept what I am about to say—that nationalisation should merely consist of taking over losses and loss-makers.
One of the reasons for us wanting to take over a successful company such as Bristol Channel Ship Repairers Limited —nobody has said that it is not successful—is that we want to incorporate the strength of successful companies within ship repairing companies and British Shipbuilders. We aim to do so on the basis of considerable decentralisation.
Much propaganda has been issued by Bristol Channel Ship Repairers Limited —indeed, it was referred to by the hon. Member for Caernarvon. That was aimed at the Bill as it was published, but my hon. Friends will know that the Government have come a long way in improving the Bill since it was published. We have two important amendments that I trust will be carried by the House, one that will require decentralisaion as a duty for British Shipbuilders. I shall read the words in the amendment to my hon. Friends to show how decentralisation is to be achieved. It requires the British Shipbuilding Corporation and British Aerospace to take account
of the desirability of promoting the largest degree of decentralisation of management consistent with the proper discharge of its functions, and whatever steps are necessary in order effectively to promote industrial democracy in its undertakings and the undertakings of its wholly owned subsidiaries.
Indeed, we have gone even further than that.

Mr. Heseltine: Rubbish.

Mr. Kaufman: It would have been better if the hon. Gentleman had replied to my letter. I invited him to have discussions on industrial democracy. Maybe he could have improved upon my proposals. I wrote to him inviting him to take part but unlike the Liberal Party and the SNP, who responded, the hon. Gentleman did not even answer the letter. The hon. Gentleman has no right to talk about industrial democracy in the Bill.
I draw the attention of the House to Amendment No. 320 which requires that British Shipbuilders should seek the
largest degree, consistent with the propel discharge of its functions, of decentralisation of management and decision-taking to separate profit centres in the shipbuilding and ship-repairing areas of Great Britain, in particular of Scotland and Wales and, without prejudice to the generality of the foregoing, in relation to sales, pricing, production, the formulation and implementation of investment programmes, manpower planning and management, industrial relations and responsibility for financial performance".
The corporation will have to report to the Secretary of State who will have to report to Parliament within six months of vesting on how this has been carried out.
Much needless anxiety has been created in the Bristol Channel Ship Repairers Limited's South Wales yards by the management's anti-nationalisation propaganda, including the claim that nationalisation will result in the closure of yards. I repeat emphatically that the Government have no proposals for closing any of these yards. I can see no reason, given the past profitability of the company, why the future corporation should not seek to build on existing strengths and to extend the benefits derived from the South Wales experience to the rest of the ship repair industry.
The hon. Member for Caernarvon said that the company wanted to get the Government off its back. In the publicity material prepared for the firm by International News Services, there is the statement:
We are independent and we have always provided for our own financing.
But the hon. Member will know that Bristol Channel Ship Repairers Limited has come to the Government for £20 million of financial aid in connection with

a dry dock that it wishes to build at Port Talbot. The hon. Member for Caernarvon will know about this because he wrote to me supporting the case that was made at the time. I replied on 20th February that this would be considered by the Organising Committee.
In the document prepared for Bristol Channel Ship Repairers Limited there is a coloured photograph of an iron ore unloading berth in Port Talbot harbour under which it says that with co-operation a dry dock could be at Port Talbot within nine months. By "with co-operation", the company means £20 million of Government assistance.

Mr. Wigley: Can the Minister confirm that no sum of this magnitude has been paid to the company and that it has received no more than the normal provisions in any development area? If the Port Talbot scheme went ahead, it would provide 1,000 much-needed jobs. Is it not regrettable that the scheme has not been given the go-ahead?

Mr. Kaufman: Naturally a scheme of this kind, which would cost £40 million, of which the firm wants the Government to pay half, would provide employment and be very valuable, though whether it is economically viable is a matter to be considered.
We said that it should be considered by the Organising Committee, but the firm seems reluctant to talk to the committee and therefore there has been virtually no movement and a leading figure within C. H. Bailey has said that the Government have passed the buck to the Organising Committee.
The hon. Member for Caernarvon said that the company could not be depicted as being hostile to trade unions. I am not jeering at the hon. Member, but it is necessary that I should draw the attention of the House to a report in today's South Wales Echo which reads:
An Industrial Tribunal has ruled that there was a 'real possibility' of victimisation against 13 men who claimed they were made redundant by a South Wales company because they were in favour of nationalistation.
The Tribunal decided the men were unfairly dismissed by the Cardiff-based Bristol Channel Shiprepairers.
The company has been running a long, costly campaign against the Government's nationalisation plans for shipbuilding.


The comments on victimisation are made in the findings of the Industrial Tribunal following the dismissal of a number of men from the company in June last year.
In his report the Tribunal Chairman Mr. Patrick Webster said that the company had failed to convince them that one of the men —Mr. T. O. O'Keefe, treated as a test case at the Tribunal—had been dismissed because there was no work for him and also failed to satisfy them that the man had not been victimised.
Mr. Webster said 'all members were left in a state of very real doubt as the real cause of dismissal and we finding ourselves in the position of believing that there is a real possibility that the dismissal was due to victimisation.'
The row over victimisation began at the company which is headed by South Welsh Nationalist Mr. Chris Bailey following his campaign in the Press with full page advertisements calling for halts to nationalisation plans for shipbuilding yards. The firm admitted spending more than £100,000 on the campaign last year and almost immediately afterwards 80 men received redundancy notices in South Wales.
A slump in the world shipping market was given as the reason. Eventually 30 men lost their jobs.
Mr. John Cooke, a legal advisor the Transport and General Workers Union, who fought the dismissals at the Tribunal held this year, commented today 'the redundancies carried out by the firm have been estimated to save the firm around £120,000 in a 12-month period. It seems to us that Mr. Bailey recouped the anti-nationalisation cause at the expense of workers.'
After hearing the Tribunal's unanimous decision that the men were unfairly dismissed Mr. Cooke said 'it is our contention from the start that workers were sacked primarily because of their pro-nationalisation views which were in line with official union and Labour Party manifesto policies. The best tonic for Mr. Bailey and others now will be the successful passing of the shipbuilding nationalisation Bill. Bailey's claim that the men were made redundant because of their work records but it seems strange that these men were all prominent Labour Party members and supporters of socialist principles. They were simply weeded out because of their views'.
Mr. Cooke said a meeting of the men involved in the Tribunal's decision would take place on Monday next week to sort out details of redundancy payments and compensation to be paid by the firm.
In his concluding remarks Mr. Webster"—
the Chairman of the tribunal—
said Mr. O'Keefe alleged, in detail, that looming large among the reasons why he was chosen (for dismissal) were his pro-nationalisation views and activities. Since we are not satisfied that these expressed views and activities were not the cause we find he was unfairly dismissed'.

5.30 p.m.
That is Bristol Channel Ship Repairers Limited, 1975–76, waging its campaign against nationalisation, and Bristol Channel Ship Repairers has been found unfairly to have dismissed workers who were pro-nationalisation.
I very much hope that all hon. Members who have been taken in by the glossy propaganda of Bristol Channel Ship Repairers will see what lies below that glossy surface when they cast their votes on both this amendment and the amendments to be discussed tomorrow. I say to hon. Members of Plaid Cymru, whom I have come personally to respect, and to respect as a group, that I know that they would not wish to be associated with that kind of activity. They are good trade unionists and good supporters of justice. I very much hope that they will reconsider their association with this company and this amendment, after we have seen the way in which Welsh workers have been treated by the company.

Mr. Heseltine: Obviously the report from which the hon. Gentleman has quoted is not available to anyone else in the House. However, as it has arrived at a partciularly interesting moment, I should like to ask why it is that not one of the workers who stayed on showed any sort of interest or sympathy in this argument.

Mr. Kaufman: If that is the best that the hon. Gentleman can do, he would have done better to retain his seat.

Mr. Heseltine: Can the hon. Gentleman answer the question?

Mr. Kaufman: As the House knows, I have endeavoured to visit Bristol Channel Ship Repairers in order to meet the workers and have meaningful discussions with them about the Government's proposals. The company has so far failed to facilitate my visit. After the report in the newspaper to which I have referred, I can well understand why the company does not want a Minister there to tell the workers about the Government's case.

Mr. Richard Wainwright: The whole House will be very grateful to Plaid Cymru Members for bringing to the Floor of the House a debate on the whole question of nationalising ship repairing. Not one company in particular but the whole sphere of ship


repairing is now to be discussed on the Floor of the House after a debate in Standing Committee on 15th January which the Government refused to make a meaningful debate. Plaid Cymru is performing a very valuable service in that respect.
The striking thing about the inclusion of ship repairing in the Bill is that it marks a watershed in the operation of nationalisation by a Labour Government, because the inclusion of ship repairing is a deliberate attempt to nationalise very small units in our mixed economy. It is the first time that separate units of groups with as few as 35 workers are deliberately to be nationalised.
This trade of repairing is essentially, by its nature, carried on in small units on a highly competitive basis, offering service at any hour of the day or night, which is completely in line with the operations of small businesses in any number of trades throughout the country. Until now we have always understood, certainly in the wool industry of Yorkshire, which is also carried on in small units, that it has not hitherto been part of the Labour Party's plans—or so the Labour Party has told the voters—to nationalise these small-scale industries which are carried on in a competitive spirit under managements that know their individual people.

Mr. Cryer: In the directors' report for Bristol Channel Ship Repairers Limited for the period 31st March 1973 to 29th March 1974, it is stated that
The average number of persons employed (including temporaries) in the United Kingdom by the Company, including shiprepairing and engineering, during the period was approximately 850 (1973, 821).
Does the hon. Gentleman accept that this is a company employing about 850 people?

Mr. Wainwright: That is in no way germane to my argument. The units of operation in distinct places are all small, involving numbers varying from about 35 to about 100. These are units which have never before come under the guillotine of nationalisation. In that sense we are at a watershed in the operation of I abour nationalisation plans. Therefore, all who are involved in small-scale enterprise under highly local management are under notice that they are now under threat of nationalisation. As regards the interjec-

tion of the hon. Member for Keighley (Mr. Cryer), I adhere to my point that in ship repairing, to be affected by this Bill, there are not more than 350 employees at most in all the different operational units of the particular company concerned.
However, my remarks are not in relation simply to Bristol Channel Ship Repairers. They relate also to the whole ship repairing industry.

Mr. Kinnock: Will the hon. Gentleman give way?

Mr. Wainwright: Time is very short under the timetable that has been imposed by the Government.
I turn to the meaningless guarantees —so-called guarantees—that have been offered by the Government about profit centres. I have some personal experience from my previous professional work of what can happen in these matters. I am very familiar with the assurances that are given in a takeover situation to people who have either sentiment or even a more genuine feeling for some particular unit that is being taken over. They are told in the most lavish and bland way—although I have never come across people in business who can be quite as bland as the Minister of State—that their particular unit will continue to be a profit-centre and to have a local board of directors who can continue to sit around the old walnut table in front of the familiar candlesticks. But what happens? Because these small units that have been give certain temporary assurances are a thorn in the flesh of bureaucratic management, every effort is made to extinguish them, because that is the way in which the promises can be ignored.

Mr. Kinnock: Rubbish.

Mr. Wainwright: One gets out of one's promise by extinguishing them. How will these small units of ship repairing be extinguished in order to let the Government out of the letter of their promise? The central bureaucracy of British Shipbuilders will divert work away from the small units that have been given this promise, in Wales and in Scotland, so that gradually the results of these profit-centres will be less and less impressive. When these small centres have eventually been driven into a state of contrived un-


profitability, they will be given the axe. Nobody is better at sacking people in the most ruthless way than our nationalised industries.
In conclusion, we understand the determination of, at any rate, a handful of Labour Members to carry out even the embarrassing parts of their manifesto. Let them bring the National Enterprise Board into the field of ship repairing if they must stick to their manifesto, but do not create a complete precedent for nationalisation by taking over units almost of the corner shop size which, hitherto, have been immune from this kind of attack.

Mr. Donald Anderson: The hon. Member for Colne Valley (Mr. Wainwright) argued that small is beautiful. He clearly had not heard the speech of the Minister who set out the turnover and total capacity of Bristol Channel Ship Repairers, for example, nor did the hon. Gentleman take on board the point that if the application for the new dry dock facilities at Port Talbot were to go ahead that would increase the company's capacity very substantially indeed. The hon. Gentleman finally argued that no one is better at sacking people than the nationalised industries. He did not appear to listen to what was said about the expertise of Bristol Channel Ship Repairers in sacking people, which has been demonstrated by the tribunal finding today.
This has been a long running issue made more dramatic by the advertising campaign on behalf of Bristol Channel Ship Repairers. That campaign has been characterised by considerable panache and a buccaneering spirit. Indeed, one feels that the campaign itself has been the object rather than the end result of keeping Bristol Channel Ship Repairers out of the clutches of public ownership. I consider that the campaign has been wholly counter-productive which has led to the setting of the company's virility against the Government's virility. Inevitably, in that situation, the Government will succeed. It has prevented a cool appraisal of the case for nationalisation and the position of that company in the new post-reorganisation structure. In short, the company

has influenced people without making friends.
I personally accept that Bristol Channel Ship Repairers should in some way be brought under the umbrella of public ownership. I would have preferred to have a less formal relationship leaving the strategic oversight of the company in the hands of the Government while still retaining the flexibility and initiative which has characterised the company.

Mr. Kinnock: Having shared those same feelings, may I draw my hon. Friend's attention to Amendment No. 15, which, hopefully, we shall reach later, which provides that precise flexibility, as well as the retention of identity, plus the advantage of meaningful industrial democracy in the company. I hope that that will reassure my hon. Friends.

Mr. Anderson: I accept that there has been a considerable advance by the Government in both those fields mentioned by my hon. Friend and that many of my own apprehensions have been settled. But at an earlier stage I would have preferred some form of equity participation by the Welsh Development Agency. That was not to be and the possibility for it is now long past.
The issue has been portrayed in very black and white terms. We are told that this is a small company which will ultimately be swallowed up by a vast bureaucratic machine.

Mr. John Evans: Would my hon. Friend accept that this is the heart of the matter? Certainly the fears of the workers which have been so skilfully and ruthlessly played upon by the management are genuine. They are that the Bristol Channel Ship Repairers will be closed down and the work sent to Tyne-side and Merseyside in the development areas. Will my hon. Friend accept that in spite of the nonsense talked by the hon. Member for Colne Valley (Mr. Wainwright), the Government have no power whatever to direct any ship anywhere? Would he agree that if a ship owner does not like a British ship repair yard he is quite at liberty to send his ship to another company in any part of the world? The Government have no powers in this respect and are not proposing to take any powers.

5.45 p.m.

Mr. Anderson: I fully accept that Indeed, because I have a constituency interest with roughly 90 constituents employed by the company, I would certainly not support this Bill if I thought that it would jeopardise their jobs. I accept that there has been a very successful campaign of stirring up the fears of the work force along the lines that my hon. Friend the Member for Newton (Mr. Evans) has mentioned.
The company has certainly a very impressive record. It took over the Swansea Dry Dock in my constituency about three and a half years ago, built it up, and today it is a thriving concern. But I think that some of its achievements have been vastly over-stated. What abort the labour relations record, for example, when it came to the real test? In a redundancy crisis situation about which one has heard from the Minister today we should ask what the reaction of the company has been. Indeed, redundancies were declared in July of last year without proper consultation with the union and the chairman himself selected the people who were concerned and determined their number. That is hardly the model of consultation which is suggested in the glossy brochures.
The company claims that it has no interest in assistance from public funds, yet we have been told about the application for funds for the Port Talbot scheme. I personally have a major concern about what the job prospects of South Wales will be as a result of this nationalisation measure.
I have mentioned that I have 89 constituents employed by this company and their own job fears have been encouraged by the strident propaganda issued on behalf of the company. One of the brochures states:
The history of nationalisation is a history of closures.
My own view is that the men involved are concerned about job security and are not concerned with ideology or who is to be the boss. They are more concerned about whether they will get their pay packet at the end of the day. The question that they and I ask is, how will the employment prospects of South Wales be affected by the Bill? Of course, there cannot be an absolute guarantee about

job maintenance whether the Bristol Channel Company stays as it is or whether it comes into public ownership. However, to a large extent, I am reassured by the assurances of the Minister and the Lord President.
I am convinced also that the best guarantee for the continuance of the company at least its present level is the political muscle of South Wales MPs. That has been demonstrated by the fight over the South Wales ports. We shall certainly be ready to act if there is any diversion of orders from the traditional customers in South Wales to other and larger yards. I am also reassured by the fact that under the new structure formidable financial resources of the corporation will be available. I am glad that the Bristol Channel estuary will be organised as a separate profit centre and I welcome the decentralisation which is the feature of it.
Welsh Nationalist MPs have claimed that this decentralisation comes as a result of their own pressure. They may not have noticed the concession which was made in Committee in January of this year. I wonder what they will be able to show at the end of the day when the debate is over and the company is nationalised?
The claim that foreign business will go elsewhere if the company is nationalised has also been made. I think that is nonsense. Foreign business men are concerned with the quality of service rather than whether the business is in private or public hands. Finally, the company has claimed that it is patriotic and that it is concerned with jobs and the well-being of its employees. When this Bill is law, that claim can be put to the test. Will it then abandon South Wales, as seems to be apparent in its latest brochure "Specialists for Hire", or will it remain in South Wales and put its expertise at the service of the nation and strive for the success in order to ensure the jobs of its employees? What is the company's commitment to its present labour force? We shall see after nationalisation.

Mr. Trotter: The future of the ship repairing industry depends not on who owns it but on its efficiency. When deciding who will be best at securing jobs in the industry in future, we have only to look at the record of the existing public industries.
The ship repairing industry is a completely different industry from the shipbuilding industry. In my constituency there is a repairer who repairs 300 ships a year. Next door, there is a very large building yard which builds only six ships a year. The only similarity between the two industries is that they are both concerned with ships. To equate the two is like equating a garage that repairs cars with a factory that constructs them.
We are talking of small units. I can think of nothing that is less likely to have its efficiency improved by the bureaucracy which is always present in nationalised industries than these small units dependent upon speed, flexibility and personal contact between management and owners. They will suffer under the dead hand of nationalisation.
The ship repairing industry is international. There are no captive customers. Anyone who wants to buy gas has to go to the British Gas Board. Anyone who wants a ship repairer can go to Amsterdam or Blohm and Voss in Hamburg if he does not like the service he gets in this country. The myth has been put about that the Bill is the salvation of jobs in the ship repairing industry. Mr. Henry Wilkinson, a union leader at State-owned Greenwells, referring to the closure of that yard and the Government's failure to take action to prevent it, said a few weeks ago:
I have no doubt in my mind that if private enterprise had tried to perpetrate some of the evils that the present Government have done on some members employed in this industry probably the whole river would be out on strike.
That is the sort of attitude we get with public ownership. The sole reason for the inclusion of this small, personal industry in the nationalisation Bill is dogma. The Minister of State said that he had no plans to close yards. The truth is that the Government have no plans of any sort for the industry.

Mr. Tom King: The amendment seeks to delete ship repairing from the scope of the Bill. In all the arguments we have had about nationalisation of the aircraft and shipbuilding industries, any impartial observer would say that the case for nationalising ship repairing has always been the weakest part of the Govern-

ment's case. As my hon. Friend the Member for Tynemouth (Mr. Trotter) said, it is an entirely different industry. The hon. Member for Caernarvon (Mr. Wigley) cited flexibility and the need to give customer service. The survival of this industry will depend not on Government money but on the number of customers it has, not just in this country but all over the world, who think that the industry does a good job promptly and efficiently at a reasonable price. We believe that that flexibility and competitiveness of service will be handicapped under nationalisation.
If hon. Members who take an interest in the Government's amendment on decentralisation, on which we shall be voting, think that it adds up to a row of beans they are even more gullible than I imagined them to be. All it means is that if the corporation comes back within three months and says that it cannot run the industry on those lines and will have to run it in the way it wants to, that is the end of its statutory obligation under the agreement.
In Committee we got to know the Minister of State. He has a great habit of producing rabbits out of hats in the most surprising way. Today the Minister produced an unconfirmed statement when he most needed it. It was supposed to come from the South Wales Echo, of which I understand there is no copy in the House. We wonder how that is. Is it just a supreme coincidence that this statement was produced at the crucial moment when the Minister of State happened to require it in an awkward debate before any hon. Member has had an opportunity to check it? The Minister has tried to pull one rabbit too many out of the hat, and we shall not be conned.

Mr. Wigley: This debate has caused a lot of rabbits to be brought out of a lot of hats. The hon. Member for Newport (Mr. Hughes), who has constituency responsibilities, referred to the safeguards in the amendments against work being transferred from South Wales to other areas. I do not share his views. When South Wales has a big order book and there is no work elsewhere, the political reality is that that work will be moved.
The Minister referred to unemployment on Merseyside. I agree that if one of the companies went to the wall there would


be a possibility of unemployment. The fundamental question is from where the work will come or from where it will be transferred. How will more international work be attracted to Merseyside—or do the Government have a magic wand which will create work?
The Minister referred to the Bristol Channel area from which he said came one-quarter of the exports that have been achieved by the United Kingdom. That is a reflection of the efficiency of Bristol Channel Ship Repairers and its performance in attracting work, although it has a smaller work force than has any other company we have discussed.
In the three minutes that remain to me I shall concentrate on the rabbit that came out of the hat at the end. It so happens that I have in my hand a copy of the proceedings of the industrial tribunal which was signed, not this week, but on 26th May, and which has been held back deliberately to be released today for political reasons. The Minister has perpetrated an offence against the House of which he should be ashamed. The Minister read quotations, supposedly from the report, reported in the South Wales Echo, but he included words which were trade union comment on the case. The onus of proof in this case was on the company. The case was not political. The case put forward by the Transport and General Workers' Union was of inadequate consultation, not political dismissal. That was not the impression the Minister gave a moment ago. The report stated that because insufficient evidence had been brought forward, the tribunal had to go on the side of the employees, but that it was possible that a full case had not been submitted. The company within a few hours of the hearing said that it would go to a higher court and appeal against the decision.

The Minister said that all the employees in the case were Labour Party members, but I have been told on good authority than one was a strong supporter of the Conservative Party. The test case employee had had two warnings about the performance of his work before he was dismissed. It will be interesting to see what the higher court makes of this.

It is easy to pull rabbits out of the hat at the last moment to swing opinion on the Floor of the House and to demoralise hon. Members who have no opportunity to reply. When the substance is considered, we see that a very different picture is presented and that the company had nothing proved against it.

Mr. Roy Hughes: Mr. Roy Hughes rose—

Mr. Wigley: No, I shall not give way. The redundancies that occurred this year were agreed by the unions concerned, in line with the Employment Protection Act. There was no question of unfair dismissal.
The case is overwhelming that the company should not be nationalised and no case has been made out for the ship repairing industry to be included in the Bill. If it is included, many people will suffer, many jobs will be lost and areas such as Cardiff will lose their economic base. I put it to the House—

It being Six o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to Orders [20th July and yesterday], to put forthwith the Question already proposed front the Chair.

Question put, That the amendment be made;—

The Committee divided: Ayes 296, Noes 302.

Division No. 293.]
AYES
[6.0 p.m.


Adley, Robert
Biffen, John
Buck, Antony


Aitken, Jonathan
Biggs-Davison, John
Budgen, Nick


Alison, Michael
Blaker, Peter
Bulmer, Esmond


Amery, Rt Hon Julian
Body, Richard
Burden, F. A.


Arnold, Tom
Boscawen, Hon Robert
Butler, Adam (Bosworth)


Atkins, Rt Hon H. (Spelthorne)
Bottomley, Peter
Carlisle, Mark


Awdry, Daniel
Bowden, A. (Brighton, Kemptown)
Chalker, Mrs Lynda


Bain, Mrs Margaret
Boyson, Dr Rhodes (Brent)
Channon, Paul


Baker, Kenneth
Bradford, Rev Robert
Churchill, W. S.


Banks, Robert
Braine, Sir Bernard
Clark, Alan (Plymouth, Sutton)


Beith, A. J.
Brittan, Leon
Clark, William (Croydon S)


Bell, Ronald
Brocklebank-Fowler, C.
Clarke, Kenneth (Rushcliffe)


Bennett, Sir Frederic (Torbay)
Brotherton, Michael
Clegg, Waiter


Bennet, Dr Reginald (Fareham)
Brown, Sir Edward (Bath)
Cockcroft, John


Benyon, W.
Bryan, Sir Paul
Cooke, Robert (Bristol W)


Berry, Hon Anthony
Buchanan-Smith, Alick
Cope, John




Cordle, John H.
Johnson Smith, G. (E Grinstead)
Rathbone, Tim


Cormack. Patrick
Johnston, Russell (Inverness)
Rawlinson, Rt Hon Sir Peter


Corrie. John
Jones, Arthur (Daventry)
Rees, Peter (Dover &amp; Deal)


Costain, A. P.
Jopling, Michael
Rees-Davies, W. R.


Crawford, Douglas
Joseph, Rt Hon Sir Keith
Renton, Rt Hon Sir D. (Hunts)


Critchley, Julian
Kaberry, Sir Donald
Renton, Tim (Mid-Sussex)


Crouch, David
Kellett-Bowman, Mrs Elaine
Rhys Williams, Sir Brandon


Crowder, F. P.
Kershaw, Anthony
Ridley, Hon Nicholas


Davies, Rt Hon J. (Knutsford)
Kilfedder, James
Ridsdale, Julian


Dean, Paul (N Somerset)
Kimball, Marcus
Rifkind, Malcolm


Dodsworth, Geoffrey
King, Evelyn (South Dorset)
Roberts, Michael (Cardiff NW)


Douglas-Hamilton, Lord James
King, Tom (Bridgwater)
Roberts, Wyn (Conway)


Drayson, Burnaby
Kirk, Sir Peter
Rodgers, Sir John (Sevenoaks)


du Cann, Rt Hon Edward
Kitson, Sir Timothy
Ross, Stephen (Isle of Wight)


Dunlop, John
Knox, David
Ross, William (Londonderry)


Durant, Tony
Lamont, Norman
Rossi, Hugh (Hornsey)


Dykes, Hugh
Lane, David
Rost, Peter (SE Derbyshire)


Eden, Rt Hon Sir John
Langford-Holt, Sir John
Royle, Sir Anthony


Edwards, Nicholas (Pembroke)
Latham, Michael (Melton)
Sainsbury, Tim


Elliott, Sir William
Lawrence, Ivan
St. John-Stevas, Norman


Emery, Peter
Lawson, Nigel
Scott, Nicholas


Evans, Gwynfor (Carmarthen)
Le Marchant, Spencer
Scott-Hopkins, James


Ewing, Mrs Winifred (Moray)
Lester, Jim (Beeston)
Shaw, Giles (Pudsey)


Eyre, Reginald
Lewis, Kenneth (Rutland)
Shaw, Michael (Scarborough)


Fairgrieve, Russell
Lloyd, Ian
Shelton, William (Streatham)


Farr, John
Loveridge, John
Shepherd, Colin


Fell, Anthony
Luce. Richard
Shersby, Michael


Finsberg, Geoffrey
MacCormick, Iain
Silvester, Fred


Fletcher, Alex (Edinburgh N)
McCrindle, Robert
Sims, Roger


Fletcher-Cooke, Charles
McCusker, H.
Sinclair, Sir Roger


Forman, Nigel
Macfarlane, Neil
Skeet, T. H. H.


Fowler, Norman (Sutton C'f'd)
MacGregor, John
Smith, Cyril (Rochdale)


Fox, Marcus
Macmillan, Rt Hon M. (Farnham)
Smith, Dudley (Warwick)


Fraser, Rt Hon H. (Stafford &amp; St)
McNair-Wilson, M. (Newbury)
Speed, Keith


Freud, Clement
McNair-Wilson, P. (New Forest)
Spence, John


Fry, Peter
Madel, David
Spicer, Jim (W Dorset)


Galbraith, Hon T. G. D.
Marshall, Michael (Arundel)
Spicer, Michael (S Worcester)


Gardiner, George (Reigate)
Marten, Neil
Sproat, Iain


Gardner. Edward (S Fylde)
Mates, Michael
Stainton, Keith


Gilmour, Sir John (East Fife)
Mather, Carol
Stanbrook, Ivor


Glyn, Dr Alan
Maude, Angus
Stanley, John


Godber, Rt Hon Joseph
Maudling, Rt Hon Reginald
Steel, David (Roxburgh)


Goodhart, Philip
Mawby, Ray
Steen, Anthony (Wavertree)


Goodhew, Victor
Maxwell-Hyslop, Robin
Stewart, Donald (Western Isles)


Goodlad, Alastair
Mayhew, Patrick
Stewart, Ian (Hitchin)


Gorst, John
Meyer, Sir Anthony
Stokes, John


Gow, Ian (Eastbourne)
Miller, Hal (Bromsgrove)
Stradling Thomas, J.


Gower, Sir Raymond (Barry)
Mills, Peter
Tapsell, Peter


Grant, Anthony (Harrow C)
Miscampbell, Norman
Taylor, R. (Croydon NW)


Gray, Hamish
Mitchell, David (Basingstoke)
Taylor, Teddy (Cathcart)


Griffiths, Eldon
Moate, Roger
Tebbit, Norman


Grimond, Rt Hon J.
Molyneaux, James
Temple-Morris, Peter


Grist, Ian
Monro, Hector
Thatcher, Rt Hon Margaret


Grylls, Michael
Montgomery, Fergus
Thompson, George


Hall, Sir John
Moore, John (Croydon C)
Thorpe, Rt Hon Jeremy (N Devon)


Hall-Davis, A. G. F.
More, Jasper (Ludlow)
Townsend, Cyril D.


Hamilton, Michael (Salisbury)
Morgan, Geraint
Trotter, Neville


Hampson, Dr Keith
Morgan-Giles, Rear-Admiral
Tugendhat, Christopher


Hannam, John
Morris, Michael (Northampton S)
van Straubenzee, W. R.


Harrison, Col Sir Harwood (Eye)
Morrison, Charles (Devizes)
Vaughan, Dr Gerard


Harvie Anderson, Rt Hon Miss
Morrison, Hon Peter (Chester)
Viggers, Peter


Hastings, Stephen
Mudd, David
Wainwright, Richard (Colne V)


Havers, Sir Michael
Neave, Airey
Wakenham, John


Hawkins, Paul
Nelson, Anthony
Walder, David (Clitheroe)


Hayhoe, Barney
Neubert, Michael
Walker, Rt Hon P. (Worcester)


Heath, Rt Hon Edward
Newton, Tony
Walker-Smith, Rt Hon Sir Derek


Heseltine, Michael
Normanton, Tom
Wall, Patrick


Hicks, Robert
Nott, John
Walters, Dennis


Higgins, Terence L.
Onslow, Cranley
Warren, Kenneth


Holland, Philip
Oppenheim. Mrs Sally
Watt, Hamish


Hooson, Emlyn
Osborn, John
Weatherill, Bernard


Hordern, Peter
Page, John (Harrow West)
Wells, John


Howe, Rt Hon Sir Geoffrey
Page, Rt Hon R. Graham (Crosby)
Whitelaw, Rt Hon William


Howell, David (Guildford)
Pardoe, John
Wiggin, Jerry


Howell, Ralph (North Norfolk)
Parkinson, Cecil
Wigley, Dafydd


Howells, Geraint (Cardigan)
Penhaligon, David
Wilson, Gordon (Dundee E)


Hunt, David (Wirral)
Percival, Ian
Winterton, Nicholas


Hunt, John (Bromley)
Peyton, Rt Hon John
Wood, Rt Hon Richard


Hurd, Douglas
Pink, R. Bonner
Young, Sir G. (Ealing, Acton)


Hutchison, Michael Clark
Powell, Rt Hon J. Enoch
Younger, Hon George


Irving, Charles (Cheltenham) James, David
Price, David (Eastleigh) Prior, Rt Hon James
TELLERS FOR THE AYES:


Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Pym, Rt Hon Francis
Mr. Andrew Welsh and


Jessel, Toby
Raison, Timothy
Mr. D. E. Thomas.







NOES


Abse, Leo
Ennals, David
Lyons, Edward (Bradford W)


Allaun, Frank
Evans, Fred (Caerphilly)
Mabon, Dr J. Dickson


Anderson, Donald
Evans, Ioan (Aberdare)
McCartney, Hugh


Archer, Peter
Evans, John (Newton)
McDonald, Dr Oonagh


Armstrong, Ernest
Ewing, Harry (Stirling)
MacFarquhar, Roderick


Ashley, Jack
Faulds, Andrew
McGuire, Michael (Ince)


Ashton, Joe
Fernyhough, Rt Hon E.
MacKenzie, Gregor


Atkins, Ronald (Preston N)
Fitch, Alan (Wigan)
Mackintosh, John P.


Atkinson, Norman
Fitt, Gerard (Belfast W)
Maclennan, Robert


Bagier, Gordon A. T.
Flannery, Martin
McMillan, Tom (Glasgow C)


Barnetl, Guy (Greenwich)
Fletcher, L. R. (Ilkeston)
McNamara, Kevin


Barnett, Rt Hon Joel (Heywood)
Fletcher, Ted (Darlington)
Madden, Max


Bates, Alf
Foot, Rt Hon Michael
Magee, Bryan


Bean, R. E.
Ford, Ben
Mahon, Simon


Benn, Rt Hon Anthony Wedgwood
Forrester, John
Mallalleu, J. P. W.


Bennett, Andrew (Stockport N)
Fowler, Gerald (The Wrekin)
Marks, Kenneth


Bidwell, Sydney
Fraser, John (Lambeth, N'w'd)
Marquand, David


Bishop, E. S.
Freeson, Reginald
Marshall, Dr Edmund (Goole)


Blenkinsop, Arthur
Garrett, John (Norwich S)
Marshall, Jim (Leicester S)


Boardman, H.
Garrett, W. E. (Wallsend)
Mason, Rt Hon Roy


Booth, Rt Hon Albert
George, Bruce
Maynard, Miss Joan


Boothroyd, Miss Betty
Gilbert, Dr John
Meacher, Michael


Bottomley, Rt Hon Arthur
Ginsburg, David
Mellish, Rt Hon Robert


Boyden, James (Bish Auck)
Golding, John
Mendelson, John


Bradley, Tom
Gould, Bryan
Mikardo, Ian


Bray, Dr Jeremy
Gourlay, Harry
Millan, Bruce


Brown, Hugh D. (Provan)
Graham, Ted
Miller, Dr M. S. (E Kilbride)


Brown, Robert C. (Newcastle W)
Grant, George (Morpeth)
Miller, Mrs Millie (Ilford N)


Brown, Ronald (Hackney S)
Grant, John (Islington C)
Mitchell, R. C. (Solon, lichen)


Buchan, Norman
Grocott, Bruce
Moonman, Eric


Buchanan, Richard
Hamilton, James (Bothwell)
Morris, Alfred (Wythenshawe)


Butler, Mrs Joyce (Wood Green)
Hamilton, W. W. (Central Fife)
Morris, Charles R. (Openshaw)


Callaghan, Rt Hon J. (Cardiff SE)
Hardy, Peter
Morris, Rt Hon J. (Aberavon)


Callaghan, Jim (Middleton &amp; P)
Harper, Joseph
Moyle, Roland


Campbell, Ian
Harrison, Walter (Wakefield)
Mulley, Rt Hon Frederick


Canavan, Dennis
Hart, Rt Hon Judith
Murray, Rt Hon Ronald King


Cant, R. B.
Hattersley, Rt Hon Roy
Newens, Stanley


Carmichael, Neil
Hatton, Frank
Noble, Mike


Carter-Jones, Lewis
Hayman, Mrs Helene
Oakes, Gordon


Cartwright, John
Healey, Rt Hon Denis
Ogden, Eric


Castle, Rt Hon Barbara
Heller, Eric S.
O'Halloran, Michael


Clemitson, Ivor
Hooley, Frank
Orbach, Maurice


Cocks, Michael (Bristol S)
Horam, John
Orme, Rt Hon Stanley


Cohen, Stanley
Howell, Rt Hon Denis (B'ham, Sm H)
Ovenden, John


Coleman, Donald
Hoyle, Doug (Nelson)
Owen, Dr David


Colquhoun, Ms Maureen
Huckfield, Les
Padley, Walter


Concannon, J. D.
Hughes, Rt Hon C. (Anglesey)
Palmer, Arthur


Conlan, Bernard
Hughes, Mark (Durham)
Park, George


Cook, Robin F. (Edin C)
Hughes, Robert (Aberdeen N)
Parker, John


Corbett, Robin
Hughes, Roy (Newport)
Parry, Robert


Cox, Thomas (Tooting)
Irvine, Rt Hon Sir A. (Edge Hill)
Pavitt, Laurie


Craigen, J. M. (Maryhill)
Irving, Rt Hon S. (Dartford)
Peart, Rt Hon Fred


Crawshaw, Richard
Jackson, Colin (Brighouse)
Pendry, Tom


Cronin, John
Jackson, Miss Margaret (Lincoln)
Perry, Ernest


Crosland, Rt Hon Anthonv
Janner, Greville
Phipps, Dr Colin


Crowther, Stan (Rotherham)
Jay, Rt Hon Douglas
Prentice, Rt Hon Reg


Cryer, Bob
Jenkins, Hugh (Putney)
Prescott, John


Cunningham, G. (Islington S)
Jenkins, Rt Hon Roy (Stechford)
Price, C (Lewisham W)


Cunningham, Dr J. (Whiteh)
John, Brynmor
Price, William (Rugby)


Dalyell, Tam
Johnson, James (Hull West)
Radice, Giles


Davidson, Arthur
Johnson, Walter (Derby S)
Rees, Rt Hon Merlyn (Leeds S)


Davies, Bryan (Enfield N)
Jones, Barry (East Flint)
Richardson, Miss Jo


Davis, Denzil (Llanelli)
Jones, Dan (Burnley)
Roberts, Albert (Normanton)


Davies, Ifor (Gower)
Judd, Frank
Roberts, Gwilym (Cannock)


Davis, Clinton (Hackney C)
Kaufman, Gerald
Robinson, Geoffrey


Deakins, Eric
Kelley, Richard
Roderick, Caerwyn


Dean, Joseph (Leeds West)
Kerr, Russell
Rodgers, George (Chorley)


de Freitas, Rt Hon Sir Geoffrey
Kilroy-Silk, Robert
Rodgers, William (Stockton)


Dell, Rt Hon Edmund
Kinnock, Neil
Rooker, J. W.


Dempsey, James
Lambie, David
Roper, John


Doig, Peter
Lamborn, Harry
Rose, Paul B.


Dormand, J. D.
Lamond, James
Ross, Rt Hon W. (Kilmarnock)


Douglas-Mann, Bruce
Latham, Arthur (Paddington)
Rowlands, Ted


Duffy, A. E. P.
Leadbitter, Ted
Sandelson, Neville


Dunn, James A.
Lee, John
Sedgemore, Brian


Dunnett, Jack
Lestor, Miss Joan (Eton &amp; Slough)
Selby, Harry


Dunwoody, Mrs Gwyneth
Lever, Rt Hon Harold
Shaw, Arnold (Ilford South)


Eadie, Alex
Lewis, Ron (Carlisle)
Sheldon, Robert (Ashton-u-Lyne)


Edge, Geoff
Lipton, Marcus
Shore, Rt Hon Peter


Edwards, Robert (Wolv SE)
Litterick, Tom
Short, Rt Hon E. (Newcastle C)


Ellis, John (Brigg &amp; Scun)
Lomas, Kenneth
Short, Mrs Renée (Wolv NE)


Ellis, Tom (Wrexham)
Loyden, Eddie
Silkin, Rt Hon John (Deptford)


English, Michael
Luard, Evan
Silkin, Rt Hon S. C. (Dulwich)







Sillars, James
Tierney, Sydney
Whitehead, Phillip


Silverman, Julius
Tinn, James
Whitlock, William


Skinner, Dennis
Tomlinson, John
Willey, Rt Hon Frederick


Small, William
Torney, Tom
Williams, Alan (Swansea W)


Smith, John (N Lanarkshire)
Tuck, Raphael
Williams, Alan Lee (Hornch'ch)


Spearing, Nigel
Urwin, T. W.
Williams, Rt Hon Shirley (Hertford)


Spriggs, Leslie
Varley, Rt Hon Eric G.
Williams, Sir Thomas


Stallard, A. W.
Wainwright, Edwin (Dearne V)
Wilson, Alexander (Hamilton)


Stewart, Rt Hon M. (Fulham)
Walden, Brian (B'ham, L'dyw'd)
Wilson, Rt Hon (Huyton)


Stott, Roger
Walker, Harold (Doncaster)
Wilson, William (Coventry SE)


Strang, Gavin
Walker, Terry (Kingswood)
Wise, Mrs Audrey


Strauss, Rt Hon G. R.
Ward, Michael
Woodall, Alec


Summerskill, Hon Dr Shirley
Watkins, David
Woof, Robert


Swain, Thomas
Watkinson, John
Wrigglesworth, Ian


Taylor, Mrs Ann (Bolton W)
Weetch, Ken
Young, David (Bolton E)


Thomas, Jeffrey (Abertillery)
Weitzman, David



Thomas, Mike (Newcastle E)
Wellbeloved, James
TELLERS FOR THE NOES:


Thomas, Ron (Bristol NW)
White, Frank R. (Bury)
Mr. David Stoddart and


Thorne, Stan (Preston South)
White, James (Pollok)
Mr. Peter Snape.

Question accordingly negatived.

6.15 p.m.

Mr. Tom King: I beg to move Amendment No. 268, in page 4, leave out lines 12 to 35.

Mr. Deputy Speaker: With this amendment we may take the following amendments;
No. 270, in page 4, leave out lines 15 to 19.
No. 316, in page 4, line 19, after 'order', insert
'but which in any case shall not include ship-owning'.

Government Amendment No. 4.

Amendment No. 265, in page 4, line 26, leave out 'to carry on such activities'.

Amendment No. 266, in page 4, line 30, leave out 'carry on any such activities'.

Government Amendment No. 8.

Mr. King: This group of amendments is intended to restrict the range of activities in which the new corporations can indulge. I hope that we shall have a more serious debate on these topics and not experience the amazing behaviour of the Minister of State in the previous debate; he made a clear attempt to mislead the House on an important matter. He may find that that effort proves counter-productive on a future occasion.
The amendments are mainly to Clause 2(5) which lays down that the Secretary of State by order may prescribe other activities in which the corporations may take part. Our concern over the widening of activities of the corporations was discussed in Committee, and obviously there are different views on both sides of the House, but the question no Labour Member has been able to answer is how one can be consistent in the view that

there should be a fixed frontier between the public and private sectors, if at the same time one allows the power of the corporations to spread into yet further related activities. The tendency will be for more and more activities to fall within the scope of the corporations, for reasons which I shall give. This will result once again in the enlargement of the public sector.
The importance of this consideration is real—not just for the future but foi the present. There are a large number of companies in related activities whose efforts are important to our export, and indeed generally. Some very important companies are involved in related areas in the aircraft and shipbuilding industries—for example, the companies involved in avionics which make outstanding contributions to exports. Those companies are not solely dependent on the British Government or on Ministry of Defence orders, but they have substantial export orders and many are recognised as world leaders in their products. I presume that it is as much in the interests of Labour Members as of us all that such companies should continue to thrive. Many of them will have plants in Labour constituencies. We are anxious to ensure that those exports should continue and that employment opportunities should be maintained and, if possible, increased. Presumably we all wish those companies well.
However, it is not good enough merely to wish them well without ensuring that we provide a climate in which it is possible for them to thrive. The risk of leaving such vague and loose powers as are contained in subsection (5), giving the Secretary of State power to allow the corporations to undertake activities of a wider kind, represents a threat to those


other companies. The difficulties are not just theoretical, potential problems that might arise; they can have an immediate impact. We have all heard the pleas of the Prime Minister and the Chancellor of the Exchequer constantly urging companies to invest. Therefore, if there is to be a substantial amount of investment in a new range of equipment, companies are entitled to have some security. They are entitled to feel that their assets will not be sequestrated or confiscated by Act of Parliament, with inadequate compensation, and that having funded developments, they will not then find themselves in competition with a State-subsidised body or an expanded public corporation.
The nation has had answers to some of these questions in the famous Marathon case. The Government faced the need to provide employment in the John Brown yard, and, indeed there was an acute and appalling unemployment prospect on Clydeside. Marathon said very fairly that it was interested in coming to Britain for the purpose of various types of construction which I shall not go into, but it said that it was not prepared to come if it was likely to be nationalised. It had read the Labour Party conference agenda, or the approved resolutions, and knew that nationalisation was part of the Labour Party programme. Mr. Danny McGarvey played a leading role in persuading the Labour Shadow Cabinet, as it then was, that an undertaking should be given to Marathon that if Labour got inti power and the nationalisation proposals went through, Marathon would be excluded. The simple truth, recognised by Mr. McGarvey in his conversation with Mr. Wayne Harbin of Marathon, was that a company threatened with nationalisation would not come here. What is true of Marathon is true of other companies as well.
The snag in the Bill is that it is not as if people are likely to be compensated to anything like an adequate extent for valuable assets. Any company could be in breach of its statutory responsibilities to its shareholders if it made an investment in the knowledge that it could be threatened later with nationalisation. With the Aircraft and Shipbuilding Industries Bill there was evidence that

for a company having assets of £10 million perhaps only £4 million would be paid by way of compensation. In that situation, no board of directors could say, if it made an investment at a time when there was a possible risk of nationalisation, that it was confident on past evidence that its funds would not be lost or confiscated.
We have dealt with the compensation arguments in an earlier debate. One of the problems that the Government will inherit is that there is now no confidence that there will not be confiscation or confiscatory terms in future nationalisation. One might be asked if this is really a valid fear. Is there really any evidence to support it? Is it, perhaps, the case that this is the sort of clause that draftsmen invariably put into a Bill of this sort? Is it possible to say that it does not really mean anything, and that the Secretary of State will never prescribe by statutory instrument that other activities shall be carried on'?
In asking these questions, I suppose that companies might look at what is happening in British Leyland. They might well wonder what is the present situation there. There are possibilities which have been discussed, and are being discussed, that British Leyland may use the public funds, which have been made available to it under an Act passed by this House and by orders passed by this House, in order to begin the production of components. These are obviously commercial decisions for British Leyland to take, but I do not think that it is in the national interest for British Leyland to do this, cutting off valuable orders placed with existing component suppliers in this country, and thereby causing unemployment in other areas, That would seem to be quite pointless, and not the sort of exercise which hon. Members on either side of the House would regard as involving the proper use of public money.
There is a very real temptation to do this, and the temptation is especially great in a declining industry. In an expanding industry, a corporation has more than enough to do in coping with its existing activities. It might need to recruit additional labour to cope with its expanding order book. The problem becomes much more difficult in a


declining industry, because the corporation, or the organising committee, whatever the title may be, is then faced with very real problems. It has an order book, and forecasts of the levels of work and of prospects. It may feel that it has not enough orders to keep all the employees fully employed. That is a difficult situation.
The most difficult and most regrettable situation, as all hon. Members know, is that in which a decision has to be taken to reduce employment. This means that some people must lose their jobs. Therefore, every management does everything it can to avoid such a situation. In such circumstances, it will look around for opportunities to expand its activities. It may have 200,000 employees and insufficient work for them to do. It may then go to the Secretary of State and ask to be permitted to make certain other products, and to move into certain other fields of activity.
In that case, what we have is the State sector expanding and expanding. I recognise that this prospect may not upset some Government Members, but it happens to be totally inconsistent with the pledge of the Leader of the Labour Party that he believes in a fixed frontier between the public and private sectors. If this frontier is to be fixed, it is not possible for such a body to expand into wider and wider activities.
One amendment of particular relevance is to the effect that, whatever activities the Secretary of State may have prescribed, they shall not include ship-owning. My hon. Friend the Member for Havant and Waterloo (Mr. Lloyd), who has particular experience in this industry, may have a few words to say about this.
Hon. Members will recognise that there appears to be a facile argument that somehow the problems of British shipbuilding may be solved if only British shipowning can be brought to heel and made subservient to British shipbuilding. The argument is that in that way all the problems of providing work in the shipyards could be successfully tackled.
I hope that hon. Members will realise —and that the Government will confirm that they appreciate—the very real hazards in this argument.
There is an amendment in the name of the right hon. Member for Sunderland, North (Mr. Willey) about co-ordinating the policies. I think the Under-Secretary of State has on occasion remarked on the difference between co-ordination and coercion. I hope that that distinction will be very closely recognised, and that we shall not slip over the line. In the case of electricity boards, for instance, the Government can exercise some coercion, perhaps, in relation to where plant purchases are placed. The hon. Member for Bristol, North-East (Mr. Palmer) is familiar with this. It is more of an internal family matter, if I may so put it, than anything else.
The shipowning industry is a very important one for this country. It is not an industry which can be seen to be at work in hon. Members' constituencies, and, because there is no obvious factory employing 2,000 or 3,000 workers in a particular constituency, many of us are inclined to forget what a significant part shipowning plays in the British industrial effort. Its earnings for this country are very considerable. It exists not in a British market but in a totally international market.
Obviously, every hon. Member hopes that British shipowners will give very favourable consideration to placing orders in British yards, but there is a great difference between encouraging this and applying any degree of compulsion. It is very dangerous to compel people to buy from yards which they may not think are the yards best suited for producing the particular type of ship or product they require. Shipowning companies have to compete on the world market in terms of rates and performance, and if they are not able to buy in the most appropriate area the most appropriate product for their needs—in the way that every other shipowner of any size is able to do —their performance will obviously be handicapped. This is an undesirable extension of a related activity. Whatever happens to the other activities, we feel that shipowning should not be included.
6.30 p.m.
The question of diversification is important to the Government. We discussed it frequently in Committee. There is a difficult point. The corporations cannot be totally hog-tied to the most minute


definition in the Bill. These powers enable the corporation to move across a much wider field. I hope I have explained why a fear exists. I hope that the Government appreciate that.
I trust that the Government will encourage inward investment in this country. I understand that they seek to do that. I know that a few members of the Government mumble about multinational companies. However, the majority of the Labour Party and the Conservative Party recognise the contribution that overseas investment has made to the economies of Scotland and Northern Ireland. Confidence, freedom from unfair Government interference, and freedom from the fear of acquisition or confiscation of assets is important to inward and domestic investment. When we speak to members of British companies about investing overseas they mention the countries to which they would not go because the political risks and risks of confiscation are too great. I have heard from presidents of overseas corporations that they are starting to wonder whether some of the same considerations apply to this country as apply to some of the less reliable overseas territories. I trust that we shall discourage them from that view. I believe that the majority of Government supporters do not have an obsessive compulsion with multinational companies and recognise that they make a real contribution.

Mr. Kinnock: Mr. Kinnock rose—

Mr. King: I am sorry that I omitted to mention Wales, for the benefit of the hon. Member for Bedwellty (Mr. Kinnock). However, I am sure that he recognises my point. We do not need to stray far from the Hoover factory and the contributions made by such companies. I shall try to give reassurance and persuade those involved of my belief that common sense will prevail.
However, I think that my reassurances are not enough when we are faced with instruments such as this, Acts of Parliament containing confiscatory terms of compensation, or lack of compensation, and giving power to Secretaries of State to give directions and make orders and instructions widening the spread of companies involved. We

are now considering one such action of the Government.

Mr. F. A. Burden: In the circumstances it would be interesting to contemplate, if firms such as Chrysler or Ford were not here, whether other companies would seriously consider coming to this country to open plants in view of the attitude of the Labour Party to that kind of organisation.

Mr. King: That is a valid point. I do not know whether the Government welcome inward investment.
I do not know whether the hon. Member for Bedwellty has spoken to the people working in these industries. It is one matter to speak to the people who are already here. They must live with the situation. They have vast investments in assets here. I do not know whether he has spoken to people who are considering investing here and discussed the considerations going through their minds. Those considerations are not strange. Investors know that the Labour Party is in favour of a massive extension of public ownership of some sections of industry. Such people know that if they come here their companies may be nationalised. They want to know how they would be repaid if the nationalisation affected them. They may say "We might be prepared to take the risk. Nationalisation would be disruptive, but we would take the risk if we knew that we would be compensated."
The damage is much wider than the effects on the industries involved. When the Labour Party NEC and its home affairs study group produce proposals, a blanket disincentive effect becomes apparent when people read them. Hon. Gentlemen would be surprised at how widely read are the policy proposals. I bitterly regret the damage done from the moment the policy proposals are made. People go through a terrible, turgid stage with the threat of approval of the proposals in Parliament.
This Bill will do damage enough. That is why it is crucial that we make clear that the extent of its influence is strictly limited. Otherwise the damage done as a result of this legislation will affect a wider range of investment and employment than anyone would wish. For that reason I shall press the amendment to a vote.

The Under-Secretary of State, Department of Industry (Mr. Les Huckfield): I beg leave to speak on these amendments and also on Government Amendments Nos. 4 and 8. Amendment No. 4 seeks to insert a subsection in Clause 2, which reads:
'(5A) The power to make an order under subsection (5) above includes power to vary or revoke any such order previously made, and no order shall be made under that subsection unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.'.
Amendment No. 8 seeks to delete Clause 2(8).
It may be for the convenience of the House if I indicate the Government's attitude to those amendments. I also wish to give as many hon. Members as possible time to speak. As usual, I should prefer to reply to the points made in debate later, with the permission of the House.
I wondered whether the hon. Member for Bridgwater (Mr. King) was talking about the correct set of amendments. Most of the amendments to which he referred seemed to come within the group which starts with Amendment No. 250, which I hope will be moved later by my right hon. Friend the Member for Sunderland, North (Mr. Willey).
The two Government amendments, and the related block of amendments, simply effect a reordering of the subsections in Clause 2. The two amendments to which I refer seek to substitute subsection (5A) for the provisions of subsection (8). In other words, the two amendments are purely drafting amendments. If the hon. Member for Bridgwater thinks that he may make all that he has said out of purely drafting amendments I shudder to think what he will say on Amendment No. 250.

Mr. Russell Kerr: We have heard the all-purpose speech of the hon. Member for Bridgwater (Mr. King) before.

Mr. Huckfield: The members of the Committee heard the hon. Gentleman's speech before. We know that it is an all-purpose speech.
I want to let the House know where the Government stand. The hon. Gentleman seeks to put as many restrictions on the nationalised corporations as he can

before they are given a chance to get down to business. That is the purpose of the hon. Gentleman's amendment. The hon. Gentleman knows that in the past, when the duties of nationalised industries have needed to be changed, it has been necessary to introduce a Bill containing the proposed legislation. He also knows that delay may be damaging.
We seek to introduce a procedure the purpose of which is to allow the duties of these corporations to be adjusted more expeditiously. Although that adjustment may be swift, we still wish to subject it to the approval of Parliament. That is what this amendment is all about. The proposals are that any new or alternative activities that the corporation will be required to carry on may be prescribed. Further, my right hon. Friend the Secretary of State may prescribe the objectives to be pursued and, apart from that, may lay down conditions subject to which any activities are to be carried on or objectives pursued. That is all that the clause and the amendments are about.
Looking at what the hon. Gentleman is seeking to do—that is his political point of view, and I understand what he is trying to do—the House should be left in no doubt that the end result, if the amendments are carried, will be that these two corporations will be severely hamstrung and shackled from the day that they start.
The hon. Gentleman is seeking to shackle the assets not merely of a private company, but of the nation, because those assets will be in public ownership. It will be the nation's economic resources on which he proposes to put restrictions.
The hon. Gentleman also knows that a company in the private sector can change its memorandum and articles of association at a general meeting. We simply propose to give the two corporations the same kind of commercial freedom. The kind of commercial freedom that is good enough for companies in the private sector ought to be allowed to corporations in the public sector. That is what the amendments are all about.

Mr. Burden: Mr. Burden rose—

Mr. Huckfield: The hon. Gentleman will have his chance to catch your eye later, Mr. Deputy Speaker.
I hope that my hon. Friends will agree to support the Government amendments


and to reject the Opposition amendments. We should allow these corporations the measure of commercial freedom which all nationalised industries ought to have.

Mr. Tom King: Referring to the difficulty about a very narrow restraint on corporations—I understand that difficuty—how will the hon. Gentleman deal with the problem of companies which might be considering investment, either coming from overseas or generated from this country, which are concerned about finding themselves in competition or taken out by an expanded public sector? How will the Department of Industry deal with that issue?

Mr. Huckfield: The matter gets worse, We had that debate last night. We spent about three hours having precisely that kind of debate on the fair trading activities of the corporation. I introduced a new clause, which the House and the hon. Gentleman accepted last night, which covered precisely that point. Further, it was reported in the newspapers this morning, if the hon. Gentleman did not understand what I said, that the chairmen of the organising committees that will become the boards of the two corporations will want to make a formal declaration of fair trading practice as soon as possible. The hon. Gentleman knows what it is about, because he was present for the debate last night.

Mr. Tom King: I do not know whether the hon. Gentleman is unintentionally or deliberately trying to avoid the point. It has nothing to do with fair trading. None of those companies can plead the Fair Trading Act, because they will be nationalised under an Act of Parliament. I appreciate that the Minister has only recently joined the Department of Industry, but this is a real problem. Hon. Members on both sides of the House are worried about the investment, which is a matter of real concern to the companies involved.
If the hon. Gentleman is unable to answer the question, I should prefer that he did not try to talk about anything else and that the matter be left for later consideration. However, if he can comment now, I shall be grateful.

Mr. Huckfield: I do not want to keep jumping up and down. I want to give my hon. Friends an opportunity to make

their contributions. The hon. Gentleman cannot be as naïve as that. We recognise precisely what he is trying to do. The hon. Gentleman is seeking to apply restrictions that would have the effect of narrowing the activities of the corporations and ensuring that, from the start, they were channelled in very narrow directions. Commercial operations in the private sector are allowed a degree of commercial freedom. I believe that the public sector and these two corporations ought to have commercial freedom as well.

6.45 p.m.

Mr. John Farr: I support the amendments moved by my hon. Friend the Member for Bridgwater (Mr. King). As I was not on the Standing Committee which considered the Bill, I shall ask the House to rise above the level of low inter-party political battle and to look at the matter from the point of view of a firm in my constituency which is grievously troubled by the Bill and its implications.
I refer to a company that is a specialist supplier to Rolls-Royce and the aerospace industry. As a Conservative Member, I object to the Bill as a whole, but, in particular, to the part that we wish to have removed. What concerns me and the firm to which I have referred is the bit in page 4, lines 12 and 13 onwards, which refers to "activities … in addition" being undertaken by a corporation
by order made by statutory instrument".
That is causing grave concern to many firms which are specialist suppliers to the aircraft industry. I object to the use of a Statutory Instrument for this purpose, which I think is an obnoxious way of proceeding. Most disconcerting and disturbing to many firms are the words "activities … in addition".
I ask the Minister, when he replies, to try to answer the point, which I shall put briefly, in an attempt to satisfy not only the firm in my constituency, but many others throughout the country which are worried about the implications of "activities … in addition".
The example that I have in mind relates to the firm in my constituency which specialises in the narrow area of providing parts for jet engines. My hon. Friend the Member for Bridgwater


talked about the capital cost of equipment and of the investment in industries which are sub-contractors to the aerospace industry. The bill that the firm in my constituency has to meet to provide one of its sophisticated machines is £130,000 a time. Obviously, if there is any likelihood of a discontinuance of its business at its present level, it will think more than once before it reinvests to keep its machines up to the top line and in line with modern technological progress, as is necessary in its sophisticated area.

Mr. Huckfield: Perhaps I can help the hon. Gentleman. So far, all he has said leads me to conclude that all he wants to talk about is Rolls-Royce and jet machines. I hope that he will accept from me, having spent some time dealing with this Bill, that neither Rolls-Royce nor jet engines are mentioned in it.

Mr. Farr: I do not think that what the Minister said is of much consequence. The Bill poses a threat to the whole aerospace industry and the many hundreds of specialist firms which supply it in many different ways.
The example that I wish to give to the House relates to a company called Cannon and Stokes Ltd., of Leicester, which specialises in providing nozzle guide vanes for jet engines. The firm makes this specialist product for a number of engines—in particular the RB211 and the Rolls-Royce Spey, Avon, Tyne and Conway and also the Rolls-Royce/Turbomeca Adour and the Rolls-Royce/ MTU/Fiat RB199. Cannon and Stokes is a specialist manufacturer of this nozzle guide vane, which fits in a gas-turbine engine downstream of the combustion chamber. These components are of very high quality precision-cast nickel alloys and they have to be machined by very advanced technological methods. A number of very sophisticated procedures have to be carried out in this plant, which employs about 1,000 people in Leicester.
Some of this firm's machine units can cost as much as £130,000 each. Very few of them cost less than £30,000 to purchase. This company is a specialist supplier and in this field has the largest facility for nozzle guide vane manufacture in one concentration in the whole of Europe. It has contracts with the main

United States of America manufacturing companies and all the European companies, and in other fields. What particularly concerns the company is the implied threat in this Bill under the term "other activities", to which I have referred, because, as the company says, there are implications in the State takeover of the aerospace industry as it is.
The worry is that the impact of the State takeover could well lessen the degree of specialist sub-contracting done by large companies in an attempt to justify the costs of overheads and other associated research and development charges. Probably the Minister is aware that most countries with a jet engine manufacturing capacity have a number of specialist subcontractors and that in the USA all the big engine manufacturers use specialist sub-contractors to get maximum advantage from high technological capabilities and specialist skills.
I ask the Minister when he replies to the debate to give an assurance not only to Cannon and Stokes Limited but to the many other specialist sub-contractors in the British engineering industry who are fearful that because of the woolly wording of this totally objectionable clause it may well be possible for the State aerospace industry, later, to move into their fields to justify some other expenditure without regard to the cost involved. I assure the Minister that if he can make a suitable statement he will not only satisfy my concern but will satisfy the anxiety of employees in many hundreds of firms throughout the country.

Mr. Arthur Palmer: I wish to speak on matters raised by the hon. Member for Bridgwater (Mr. King) in moving the amendment he proposes to this Bill, not because I have so far followed this measure in any great detail but because of my general interest in the working and structure of nationalised industries. It can be said that the experience of nationalisation in this country, in public corporation form, which now goes back a fair way, to before the last war, is that one of the difficulties—the weaknesses, one might say—of the process of parliamentary democracy in operating by statute is that the terms of the statute tend to place the activities of the undertaking in a legislative straitjacket, so that without a new


statute it is extremely difficult to make any change.
Life is such that nothing stands still. Things always change and evolve. The private sector of industry is evolving quite naturally all the time to meet changing circumstances, and the public sector must equally be involved in change to meet changing circumstances. If a statute freezes the structure and method of operation, and the interests, of an industry at the particular time of its nationalisation we are giving very grave cause for concern for the future. The Bill as drafted, quite rightly in the light of the experience not only of Labour Governments but, I should have thought, of Conservative Governments, provides that it should be fairly easy, subject to constitutional safeguards, for changes to take place in the organisation and structure, and in opportunities for obtaining new business in nationalised industries, as is normally the case, quite naturally, with joint stock companies. I can see nothing objectionable in that.

Mr. John Cope: Mr. John Cope (Gloucestershire, South) rose—

Mr. Palmer: If the hon. Gentleman will allow me, I shall not give way for a moment, as I wish to make another point; after that I shall give way. There is another reason why I believe it is important. In what he said the hon. Member for Bridgwater did not seem to take into account the question why there should be this provision in the statute. It is to ensure that the Minister does not interfere in matters in which he has no authority to interfere. If ever a set of Ministers interfered with the day-to-day work of the nationalised industries, particularly the fuel industry at the time of the fuel crisis, it was Conservative Ministers. They were always interfering.
I sometimes talk to chairmen of nationalised industries. If one talks to them privately one finds that they all complain bitterly about the way in which Conservative Ministers interfered. I do not know whether or not they were bought luncheons, but this sort of thing is sometimes known as the "lunchtime directions". They are told, "The Government do not want to make this the subject of an Order, or to bring it out publicly, but if you can adjust your policy it will help a great deal." That

was done constantly by Conservative Ministers. I see their difficulty. They wanted changes made, but apart from issuing a general directive in the national interest, which is a clumsy method. they had no statutory power. Therefore they did it by way of the so-called "lunchtime direction".
It is very important for the effective operation of nationalised industries that the powers of all concerned should be strictly and carefully defined in the statute, and if a Minister is to have extra powers so that the activities of a corporation can be broadened—and normally this will be at the request of the corporation—those powers should be defined. In my judgment this would do away with much of the need for the behind-the scenes guidance that can come from Ministers to nationalised industries. This would give a greater sense of security to those who have to run these industries.

Mr. Cope: I am grateful to the hon. Gentleman for giving way. I entirely agree with him on his last point—that the statute should be rigid in its terms. The amendment seeks to take out ways in which the statute would be capable of being varied by the Department, so really the hon. Gentleman is not arguing against the amendment.
The point that I wish to put to the hon. Gentleman arises from his mention of experience. Can he give us from his experience past examples of nationalised industries that have wanted fundamentally to change their activities—which is what this amendment is about—as opposed to wanting to change their organisation, which is not the subject of this amendment?

7.0 p.m.

Mr. Palmer: It is difficult to answer that question off the cuff, but I know from experience that on several occasions the nationalised electricity supply industry or the boards or the CEGB have wished to undertake some marginal manufacturing activity which they thought would be in their interests and which a private company could do if it were within its articles of association—and they have been limited by statute.
I do not want to get out of order, but I would use this industry as an example It has been said to me by one Chairman of the Electricity Council that he would


like to do one or two things which he thought were in the interests of his industry but that he could not do so without asking for legislation and that there was no parliamentary time available.
That is the issue. Therefore, the powers in the Bill to give greater flexibility for the Minister to follow up the changing needs of an industry by simple legislative methods of this kind are very sound. Presumably the Opposition hope to get back to power. I hope that they will not, but one must take account of that constitutional possibility. If they do, they will find that these powers will be just as useful to them, since on past experience they have interfered behind the scenes more than most.

Mr. Teddy Taylor: The Minister's reply was astonishing. He suggested that my hon. Friend the Member for Bridgwater (Mr. King) was not on the mark. Although both you and I, Mr. Deputy Speaker, have been up all night debating a tragic decision by the House of Commons on licensing in Scotland, having listened carefully I am afraid that the Minister is the one who has got it all wrong.
First of all, the Minister said that we are concerned here only with the freedom of State industries to do what they want. That is not what the clause or the amendments are about. Clause 2 is about the duties of the corporations—things which the Minister tells them to do after consultation, but not necessarily with agreement. I hope that the Minister will accept that he was completely wrong on that matter.
The matter is far more dangerous than that. It is Clause 3 which deals with the activities and powers of the corporations —the things that they can do. I was astonished that, reading from what appeared to be a prepared brief, the Minister should have made this mistake. Either the civil servants have been up far too late and have got it wrong or the Minister has attempted, inadvertently, to mislead the House.
I hope that the Minister will interrupt me if I am wrong. This clause has nothing to do with commercial freedom. It deals with the Secretary of State's power to prescribe activities.
The Minister is not even looking. He is hiding his head in shame. Is it true or not that under this clause, far from the corporations being free, the Minister will be able to instruct British Aerospace, for instance, to start producing aero-engines? He said that this clause was not about jet engines or Rolls-Royce.

Mr. Burden: Which is nonsense.

Mr. Taylor: I challenge the Minister. Could he not issue an order that British Aerospace, from 1st January next year, must produce aero-engines? He has not interrupted me. Again, he is hiding his head in shame. He is not even looking to his officials to see whether they can say why he has misled the House.

Mrs. Elaine Kellett-Bowman: He does not even have a PPS.

Mr. Taylor: No, he does not even have a PPS to run along and ask the officials. Was the Minister quite blatantly but inadvertently misleading the House when he said that this was a matter of freedom and that jet engines were not involved?
He is steadying himself to rise. Perhaps he is going to say something. No —he has thought better of it.
In the absence of any intervention by the Minister, I must assume that he accepts what I said—that he was blatantly but inadvertently misleading the House and the country. Again, he has not budged. He is just looking blankly into space, showing that he would rather not be here listening to what is being said.
Ah—the PPS has arrived. We shall now see messages flying along to the officials to the effect: "Why did you give me duff gen on which to answer the debate?"
The Minister was also wrong in saying that the issue was that a nationalised corporation should have some of the powers of a company. He said, "Why should the nationalised industries not have the same powers as capitalists?"

Mr. Russell Kerr: Absolutely right.

Mr. Taylor: It is not absolutely right: it is absolutely wrong. If the Minister had some officials who knew a little company law, he would have been told that this was not the case.
In a private company, a general body of shareholders can attend the general meeting and ask for the articles of association to be changed. If I were a major shareholder in a rubber company, which, unfortunately, I am not, and I thought that the day of rubber was over and that the company should produce aeroengines, I could go to the general meeting and say so. We, the shareholders, could say that the articles of association should be changed so that the objects of the Taylor (Indonesia) Rubber Company would cover the production of rubber in Indonesia and aero-engines in Glasgow.
There is one vital difference. Whereas under the clause if the Minister tells a corporation what to do it has to do it, the articles of association of a company are more like Clause 3 powers—things that it can do if it wants to. The directors of my rubber company can be told to change the articles of association but we, as shareholders, cannot tell them what to do then. Shareholders do not have the powers of instruction that Ministers will have. So the Minister is absolutely wrong on this.
Again the Minister is not listening. Instead, he is talking to the Chief Whip, who is no doubt telling him all about the long sitting last night and the unfortunate decision that the House took on Scottish licensing. The Minister should be trying to find out why he gave such "duff gen" to the House on a simple but vital matter.
Why has the Minister got it so wrong?

Mr. Russell Kerr: He has not.

Mr. Taylor: Of course he has.

Mr. Russell Kerr: He has not.

Mr. Taylor: If the hon. Member wishes to defend the Minister on these two points, I hope that he will intervene and say so.
Does the Minister accept that we are talking about duties and not about freedoms? Does he accept that these duties are imposed by the Secretary of State, and are not things that the corporation can choose to do? Does he accept that it is wrong to say that what is being sought is the same basis as a private company? Although the articles of association can be altered, directors cannot be directed to do certain things.
I have not been challenged and I have not been interrupted, except by the hon. Member for Feltham and Heston (Mr. Kerr), who always makes rumbling noises throughout our debates.
What is the precedent? As hon. Members are aware, there are major problems facing us economically. On top of that, we have dangers from this wretched Common Market, because their laws take precedence over ours.

Mr. Russell Kerr: Now the hon. Member is talking sense.

Mr. Taylor: It is high time we looked at the effect of the Common Market on our economy. All the promises that were made to us about the advantages of it were wrong. The basic problem is that Common Market law takes precedence over British law.
In the same way, directions given by the Secretary of State to the corporations take precedence over the basic duties that are laid down in Clause 2 (1) and (2). My understanding is that the duties prescribed by the Secretary of State under subsection (5) take precedence over the basic duties laid down. So, we have our jet engine situation. If the Secretary of State orders British Aerospace to start producing jet engines, that order takes precedence over the basic duties that we have laid down in the Bill. Obviously, we are very worried about this, and industry is worried as well.
If I were a rich American entrepreneur and investor, with $200 million in my pocket, I would decide that it would be better not to come to Britain and invest, because I might find that British industry starts producing things that I am already producing and that I do not want. That would lead to unfair competition, and there is no real protection in the Bill against unfair competition from State corporations.
The Minister may claim that this is just scaremongering. Why is it, then, that we have 165,000 unemployed in Scotland? Why is it that the oil industry is going wrong? Only a genius could make a financial disaster of the oil industry, yet that is what is happening. Why are men being put out of work on oil platform sites? The answer to all these questions is that the threat of


nationalisation has led to a lack of investment. As long as the Government waste money, and Socialism is extended, this sort of thing will continue. My hon. Friend the Member for Bridgwater is absolutely right, and the Minister is wrong.
Why are things going so wrong for industry? What is happening to investment? Why are American firms not coming here any more? Part of the reason is this dreadful Common Market, but we cannot discuss that now. The one thing we should get is the expansion of the oil industry, but that is not happening, because of the uncertainty that exists.
The Minister may tell us that there is no need to worry, because the Secretary of State is a reasonable man. That may be true, but he will not always be there. How do we know that some nutcase from the Labour Party's home affairs committee will not take over, or that the Secretary of State for Energy will not be transferred back to the Department of Industry and start taking over these powers? We have no guarantees at all. We are not talking about investment for a week or two. We are not talking about a petro-chemical factory that will list for a month, or a year; we are talking about investment and factories that will need to last 20 or 30 years. But we shall have no guarantee as long as these powers exist without limit.
There is nothing to stop the Secretary of State asking the corporation to start making jet engines, machine tools or even motor cars. The Labour Party can achieve full nationalisation of all the means of production, distribution and control with this one little subsection of this one little clause in this one little Bill.
This Bill is really three nationalisation Bills in one. Clause 2(2) gives the Government power to extend State ownership into every activity. It does not merely give the Minister power to do so; it gives him power to instruct the corporation to do so. Suppose that my hon. Friend the Member for Gillingham (Mr. Burden) decided that the House of Lords needed strengthening, and went there. If,

because of his talents, he was made Chairman of the Aircraft Industry Board, he would find that even though he was appointed under a Conservative Government, a Labour Secretary of State could instruct him to start producing aircraft engines, to start building hospitals, or to start doing anything at all. My hon. Friend, or my noble Friend as he would be then, would have no option but to do what the Government told him.
This is not about freedom; it is about duties. It is about the things that the Secretary of State can tell the State corporations to do. The Minister knows that I am right when I say that he has totally misled the House.

7.15 p.m.

Mr. Ron Thomas: I have been listening to the hon. Member for Glasgow, Cathcart (Mr. Taylor) very intently. Can he explain why it is quite legitimate for Hawker Siddeley to diversify into all kinds of fields of engineering but quite wrong for BAC to exploit some of the wonderful technological spin-offs from tht production of aircraft or aero-engines?

Mr. Taylor: Clause 2 gives a duty that is very wide. If it were a case of the State boards diversifying into similar or related fields, that would be fair enough, but there is nothing at all in this subsection to prevent the Secretary of State from instructing the aircraft industry to diversify not just into related fields but into anything at all. It could be instructed to run hotels in the Highlands, or to start growing bananas on Clydeside. The powers are unlimited.
Nationalisation eats up more and more resources and scares away private industry and investment. We must reject this subsection, go back to 100 per cent. Tory policies, and get rid of this nonsensical obsession of extending Socialism everywhere, which pervades the Labour Party all the time and even creeps into the Tory Party sometimes.

Mr. R. C. Mitchell: Obviously the hon. Member for Glasgow, Cathcart (Mr. Taylor) is still suffering from his major defeat on licensing last night. I suggest that he uses the Common Market machinery and goes to the European Court of Justice. Maybe it could help him. Last night I said that an efficient nationalised industry


should have no fears about competition from the private sector. This sentiment was applauded not only by my Front Bench, but by the hon. Member for Glasgow, Cathcart. Why is it that today he feels that private industry should fear competition from the public sector?
If British Shipbuilders and British Aerospace feel that they could do subsidiary work efficiently and in the interests of the country, why should they not do so? If we want to improve the efficiency of these corporations, why should we prevent them from competing with private industry, and why should private industry be afraid of such competition? The Opposition are great upholders of competition, so why should they shackle private industry and prevent it from competing fairly with public industry? What are they afraid of? Do they not believe in fair competition?

Mr. Cope: The hon. Member talks about fair competition, but does he not realise that the clause that we inserted in the Bill last night does not concern any duty undertaken by either of the corporations under Clause 2?

Mr. Mitchell: The Conservatives never cease to amaze me. They always try to claim in some way that publicly-owned industry is the sector which acts unfairly. One could give many examples of where privately-owned industry treats nationalised industries unfairly, and if the hon. Member wants an example let him just look at Post Office telecommunications.
The hon. Member for Bridgwater (Mr. King) made certain remarks about shipowners. He said that it would be impossible to force British owners to buy their vessels from British yards; the Government should try, however, to encourage that as much as possible. The sad fact today is that in many cases, because of the tax situation and other factors, there is a positive incentive for British owners to have their ships built abroad. I hope that the Government will look into that.
I should like to know what are the rules in Japan. I suspect that Japanese shipowners are subject to certain rules about buying their ships from Japanese yards. The Government should put as much pressure as possible on to British owners to have their vessels built in British yards.

Mr. Burden: I was not a member of the Standing Committee examining the Bill, but I completely agree with my hon. Friend the Member for Bridgwater (Mr. King), and I was greatly surprised that the Under-Secretary should tell my hon. Friend the Member for Harborough (Mr. Farr) that there was no fear for the company in his constituency. The hon. Gentleman implied that there would be no question of British Aerospace participating in the development and construction of jet engines. However, if the Secretary of State decided that it should he could instruct it to embark upon such activities, or, for that matter, upon any other activity that he might suggest.
I am sure that many Labour Members below the Gangway who are out-and-out nationalisers would welcome that approach. It will provide the bones of the skeleton upon which they can put the full flesh of nationalisation. Labour Members do not seem to understand that when such a situation arises firms in the areas of private industry threatened by an extension of nationalisation are reluctant to invest and, above all, investment by multinational companies in this country is threatened.
Many Left-wingers would like to extend nationalisation until it controls the whole of British industry. They have stated that categorically, and the public are aware of their intentions. I am convinced that their attitude frightens away overseas companies which might otherwise want to establish businesses in this country.
What concerns me is that suddenly on the Labour Benches there is again this great campaign and crusade for more nationalisation. For some time now the words "public ownership" have fallen by the wayside. They became very unpopular because the ordinary people of this country knew full well not only that they had no control over such industries, and many of them are discredited in the eyes of the public. For example, the public had no control over the 35 per cent. increase in the prices of nationalised industries between March 1974 and March 1975. That figure was given to me by the Financial Secretary to the Treasury last Friday, in a Written Answer.
Now we are told there will be more nationalisation. In addition to the industries in the Bill, public money will be spent in opening up ancillary organisations and businesses, but without any increase in public accountability.

Mr. Martin Flannery: The hon. Member has raised a very important point. I am sure that he is aware that we use the expression "public ownership" as widely as we can and we try to improve it and to increase public accountability, although that is a difficult job. Is the hon. Gentleman suggesting that by some strange alchemy the public have some control and accountability over private industry? Is he aware that the much-vaunted private industry of which he speaks receives at least £3 million of public money a day in order to keep it going? At the moment there is a strike of capital in which these companies have thousands of millions of pounds in the banks which they refuse, at the behest of the CBI, to invest. While refusing to invest they talk about patriotism.

Mr. Burden: The hon. Gentleman is quite wrong. We in this House, as representatives of the electorate, cannot question the day-to-day activities of the nationalised industries that involves such things as fare increases or other price increases. In a private company shareholders have the right to attend an annual meeting, to ask questions and to insist upon proper replies. The hon. Member asked about investment in private industry. I believe that Governments—and I include my own on one occasion—have done wrong to pour public money into private industry. That does not make private industry competitive.
If the nationalised corporations in the Bill have activities forced upon them by the Minister they cannot be described as independent bodies. Always the threat of that will hang over them, even if they consider that the duties imposed upon them by the Minister—perhaps he will be a Left-wing Minister—are contrary to the best interests of the corporation they manage. But having entered into such an activity they will almost automatically, whatever the cost may be, order all their supplies from the component firm that they have set up, for that is what the Minister will require.
7.30 p.m.
What about the other industries, firms and companies that have been supplying components to the nationalised industry, often for a considerable time? Unless they can find new customers in different industries they will probably be forced to close down. I remind Labour Members that some of the industries so affected may be in areas that they represent. I have stated the facts. If we impose these problems upon private industry the sector will withhold investment. That will make it impossible for them to compete in this country. Many of them, not merely because they fear nationalisation but the threat of competition from a company controlled within a nationalised corporation, will not invest and, therefore, will also not be competitive in overseas markets. The effect of that situation could be considerable right across the board.
It has been said that the Government should find some means of ensuring that British shipowners buy their ships in British yards. But that will not make them competitive in world markets. The only reasons for British ship owners buying ships abroad is because they are of better quality—that also unfortunately now applies to a wide range of goods—cheaper, or on quicker delivery dates. When we consider high cost capital goods such as ships that cost many millions of pounds, against which companies have to borrow, many at high interest rates, such matters become extremely important.
In answer to me the Prime Miinster stated that there would have to be rationalisation in the shipbuilding industry. That can only mean that there must be cutbacks in the industry to try to make it viable. In other words, some people must lose their jobs. If ship owners are not competitive because they cannot obtain ships from our own yards on favour able terms, they cannot compete in the cost of the freight or passengers they have to carry. If that situation comes about, it will be the Government alone who will be ordering the ships from the yards. For what purpose and with whose money will that be done? What will they do with the ships when they have bought them? No matter what may be said to the contrary, in the final issue only orders for ships will keep the yards open and the men employed.

Mr. Frederick Willey: I shall intervene briefly. I hope that it does not sound arrogant, but I wish to contribute a little common sense to the debate. It has been an infantile debate so far. Probably this is the only country in the world where this debate could have taken place. We are dealing with the nationalisation of the shipbuilding, ship repairing and aircraft industries. I am sure that no other country would have seen such a debate on these industries.
I am not too enthusiastic about the provision in the Bill but it happens to be in its present form—namely, providing for a statutory instrument—because of the sort of debate that we have held. Any other country engaged in nationalising these industries would have said "Make a go of it and exercise your judgment on behalf of the industries".
That is what we must do. We talk about commercial judgment and managerial judgment. It does not make any difference whether the industry has been nationalised or is private; that judgment must be exercised.
In Committee we had repeated reference to Greenwell's, a yard that has been closed. We have also had discussions about Bristol Channel Ship Repairers Limited, which has an interest in Green-well's. There happens to be in that yard another interest which is concerned with using it for non-ship repair activities. I do not know whether hon. Gentlemen will say that my constituency must be inflicted with unemployment, when we can employ the people in the yard.
That is the issue. It is as simple as that. We have dry dock facilities which can be put to other purposes. I am concerned about my constituents having a chance to work. I do not want any rigidity or inflexibility which would prevent them from having that chance. I do not say that the yard will be put to non-repair purposes, but it is a matter that has to be considered. I do not intend to have the yard precluded from that sort of use.
The hon. Member for Gillingham (Mr. Burden) knows nothing about shipbuilding or ship repairing. I tell him that it is important that such undertakings should have an association with a shipping line. That is one of the greatest

assets that a shipbuilding or ship repairing organisation can possess.

Mr. Burden: With great respect to the right hon. Gentleman, he is deliberately misquoting me or suffering from a delusion. I said that British shipowners have to buy ships where they can buy them at prices that are competitive. That is because they have to run them against other countries' ships. Unless they can buy them at competitive rates they will not be able to run them at competitive rates.

Mr. Willey: I must tell the hon. Gentleman that he is talking nonsense. One of the strengths of the Sunderland yards—namely, Austin and Pickersgill Ltd. and Sunderland Shipbuilders Ltd.—is that they have an association and relationship with shipping lines. Austin & Pickersgill Ltd. is associated with Overseas Freighters and Sunderland Shipbuilders is associated with Court Line. We do not want this naive Court Line. We do not want this naive and infantile talk. We know full well why such associations are important—namely, because the shipping lines can determine the timing of their orders. That is important for continuity of work. Time and time again orders have been placed in the Sunderland yards because there has been an identity of interest between the builders and the shipping lines.
I now turn to an essential factor that has had a detrimental effect on the British shipbuilding industry. This is why the industry has fallen behind the shipbuilding industries of other countries. By its nature, it is a cyclical industry. That means that it must diversify. Let us bear in mind that the Japanese yards are part of huge complexes. It is an enormous advantage for a cyclical industry to have diversification. Many other countries have learnt that it is vital to have a measure of diversification. With that background it is possible to be more ambitious. This is where the British yards have lost out. It is possible to be more ambitious on the upswing if it is known that if there is a return swing it is possible to engage in other work.
The other factor that should be borne in mind is that, in common with other countries, we need a sense of responsibility between firms, whether or not they


are nationalised, and their work people. If we get that sense of responsibility we shall get a much more effective industrial policy. Let us have our large industries having a full sense of responsibility. For example, let the British Steel Corporation take full responsibility for its employees. In the North-East the National Coal Board was responsible for scores of thousands of miners being paid off without having to take any responsibility. There were no discussions about redundancy but there should have been discussions about jobs. The board should have had a feeling of responsibility, which means diversification. Unless we tackle our industrial problems in this way, we shall continue to lose out to other industries which have done so. We can see how the industry is run in Japan and West Germany.
We ought to be saying that we appreciate the serious difficulties facing the shipbuilding and ship repairing industries. Things have gone so badly in this cycle that no one in the industry believes that there is any alternative to a State takeover. Let us now get down to the basic problem and see that the industries have the tools to tackle the difficult situation facing them.

Mr. Ian Lloyd: If I attempted to follow the right hon. Member for Sunderland, North (Mr. Willey) too closely, I should run a grave risk of being regarded as naive and infantile. Though I have often discussed these matters with the right hon. Member, I cannot accept his analysis of what my hon. Friend the Member for Gillingham (Mr. Burden) said as naïve or infantile.
In declaring my interest as group economic adviser to a major British shipping company, I can tell the right hon. Member for Sunderland, North that when British ship owners consider where to buy and build ships, many considerations other than the important one of the desirability of building in British yards are taken into account.
Listening to my hon. Friend the Member for Bridgwater (Mr. King) moving the amendment. I realised that was receiving what could be described as launching aid. Following his usual trenchant and vigorous defence of the industry, I also received launching aid

from other hon. Friends until I worried that there might be a danger of my missing the tide. Fortunately that has not happened and I shall be as brief as I can.
The Under-Secretary said that nationalised industries were dealing with the nation's assets while privately-owned shipbuilding companies did not control the nation's assets. What an extraordinary statement! If we aggregated the capital of the British shipbuilding and ship owning industries and analysed the shareholdings, sub-dividing them among the insurance and pension funds involved, we should discover that the industry is owned by the whole nation.
We object to the fact that nationalisation may take place virtually by statutory instrument. It would be bad enough if we were proposing to nationalise the shipping industry, with its vast turnover and overseas assets, and proposing surreptitiously to allow it to nationalise the shipbuilding industry, which is about one-tenth of the size of the shipping industry.
But we are allowing a very small tail at least the possibility of wagging a very big dog. The Government want to be able, by Statutory Instrument, to use their interest in shipbuilding and the corporation to nationalise shipping. We object to surreptitious nationalisation.
There is now a crucial dividing line between the public and private sectors in this country. If the Government choose to extend it, let them come formally, officially and publicly to the House to do so. It is crucial that nothing should be done surreptitiously or by chance. It should be done in the most overt possible way.
The Government may ask why the corporation should be restricted. Let us discuss its options. It may liquidate and stop building until the market recovers and then perhaps diversify. Another option is to build for speculative demand—a concept viewed with horror by hon. Members opposite. Quincy in the United States and Götaverken in Sweden are building for speculative demand and have established ship operating companies to take care of this momentary speculation.
Finally, the corporation could operate ships and, in the longer term, could reorganise and restructure the industry.
7.45 p.m.
The OECD has given specific advice to the Government that there is a structural crisis in the industry and that Western Europe will not escape unless it restructures the industries which will involve a substantial reduction in capacity. The Government apparently do not accept this conclusion.
We are told that there is a possibility that the shipbuilding corporation might build for speculative demand. This involves creating additional shipping capacity and builders entering a sphere of demand judgment made by ship operators.
The corporation may do this. We can all deplore its judgment. Ship owning and operating is a very different matter from shipbuilding and is carried on in a very different commercial environment. Such diversification could involve a major diversion of capital, which is already scarce in the shipbuilding industry, as well as a major diversion of managerial skills.
There has been criticism from both sides of the House about the management of the industry. Are the managers now so richly endowed with enterpreneurial and managerial skills that they can take on the running as well as the building of ships? I doubt it.
Some hon. Members may say that there is little likelihood of this happening. I say that we should learn from the lesson of Maritime Fruit Carriers and what can happen when a major yard such as Swan Hunter believes that its interests depend on buying out a major customer in order to keep the yard alive.
I wonder how long it will be before that consortium, whether nationalised or not, will come here saying that it made an error of judgment, entered a market that was heavily over-subscribed, where all the signals were red and all the instruments read "change ", but that they did not see the red and chose to ignore the signals. If the Bill goes through unaltered, we shall be institutionalising within the system the capacity to resist market symbols.
If there is an institutionalised attempt to resist market signals, one thing is certain—it will be a commercial disaster and the bailing out will rebound on to the backs of the British taxpayer.
Only this morning we had presented to us the NEDO report which points out that most of the profits made by nationalised industries, about which Ministers have been boasting, would actually be extravagant losses if inflation accounting techniques had been applied to them.
I am arguing as strongly as I can that there must be no surreptitious nationalisation. The reputation of the technique is damaged enough already. If, for political reasons, the Government wish to extend the technique, there is only one legitimate way of doing it and that is to bring a Bill before the House.

Mr. Les Huckfield: The hon. Member for Havant and Waterloo (Mr. Lloyd) does not do himself justice. The clause and the Government amendments go very much along the lines that he has been advocating.
The hon. Member wants to see freedom for nationalised industries to respond to pressures of the market. The clause and the amendments enable the Secretary of State to amend the duties of the corporation so that it can respond to the market.
The hon. Gentleman says that he does not want anything done in a covert or secretive way. That is precisely what the clause and these amendments do not allow. The amendments insist that if changes are to be made in the duties of the two corporations, my right hon. Friend will have to come before the House under the affirmative order procedure. In other words, in relation to precisely the kind of things that the hon. Gentleman has been saying he fears, he can find a great deal of reassurance in the clause.

Mr. Ron Thomas: I know that my hon. Friend the Under-Secretary joined the Committee on the Bill rather late in the day. However, in our discussions on this matter the Minister of State was faced with two opposing forces. Many of us, including myself, wanted to give a large freedom to the corporations to diversify. On the other hand, the Tories wanted to keep them in a straitjacket. The clause seems to fall in the middle.

Mr. Huckfield: My hon. Friend has been considering the Bill for a long time and obviously knows it better than I do. However, he makes exactly the point that


I was about to make. My right hon. Friend the Member for Sunderland, North (Mr. Willey) and my hon. Friends the Member for Bristol, North-East (Mr. Palmer) and the Member for Southampton, lichen (Mr. Mitchell) have been making this kind of point. They want to see these corporations having the flexibility to respond to new activities and having the power to diversify. The clause en, ables my right hon. Friend to amend the corporations' duties, with the approval of the House, so that they can do that.

Mr. Cope: Will the hon. Gentleman give way?

Mr. Huckfield: Perhaps I may make my own speech. The hon. Gentleman has had his chance of catching the eye of the Chair.
These are powers which were contained in the Iron and Steel Act 1975, which governs the activities of British Steel. They are powers which were also in Section 2(1) of the Iron and Steel Act 1967. Most important of all, however—I hope that the hon. Member for Glasgow, Cathcart (Mr. Taylor) will listen carefully to this—is that in relation to such activities and duties as these, this kind of freedom is precisely that which was conferred on Rolls-Royce 1971 by the Conservative Government. When the Conservative Government took Rolls-Royce into public ownership, they created a structure which enables the memoranda and articles of Rolls-Royce 1971 to be altered by the shareholders—now the National Enterprise Board—without coming to the House for approval—in other words, precisely the kind of thing that the hon. Gentleman was attacking previously. That is precisely what was intended by the Conservative Party when it took Rolls-Royce 1971 into public ownership.

Mr. Teddy Taylor: Does not the hon. Gentleman accept that altering the articles of association of a company alters what the directors can do if they so desire, whereas under the amendment the Minister is taking powers to instruct the nationalised corporations on what they must do, and not what they may do?

Mr. Huckfield: I am continually at a loss to understand the hon. Gentleman's comments or their relevance to the debate

—especially when we had that tour de force of the Ceylonese tea plantations and the usual things to which we have become accustomed. He knows that the Secretary of State has powers under the clause to alter the duties of the corporations, just as shareholders may alter the duties of a private company. We seek to give my right hon. Friend the power to change the duties of the corporations in the same way that shareholders can change the duties and objects of a private company.

Mr. Teddy Taylor: There are no duties on a company.

Mr. Huckfield: The hon. Gentleman always chunters on, and we get used to that. However, I hope that he will recognise that what I have said follows the precedent set by his party when Rolls-Royce 1971 was taken into public ownership.
The hon. Member for Harborough (Mr. Farr) talked about a company in his constituency as though it were a very small concern which would be at the mercy of this monolithic, bureaucratic corporation structure that he said we are about to set up. Perhaps the firm has not told him that it happens to be part of the Associated Engineering Group, which last year had a turnover of some £208 million. That hardly sounds the sort of tiny creature that would be at the mercy of the two corporations that the Bill will create.
The hon. Gentleman and his hon. Friends seek to distort the objectives of the clause. Under the clause there is not a general, all-pervasive duty to diversify and do everything else concerning these two industries. That is precisely not what is intended. As my hon. Friend the Member for Bristol, North-East made very clear, the duties imposed by the clause are very specific. My right hon. Friend's powers are very specific, as will be the activities of the corporations and their duties to be laid down by my right hon. Friend.
What we seek to do is to enable my right hon. Friend to confer upon the corporations the freedom to enter new fields on fair terms. I only wish that when Opposition Members were in Government and introduced legislation, the kind of changes that they sought to introduce


had been subject to the parliamentary approval and parliamentary acquiescence that my right hon. Friend will have to secure before these duties are amended.
I stress to hon. Members, particularly the hon. Member for Havant and Waterloo, that it is right that my right hon. Friend can alter the duties of the corporations under this clause. However, hon. Members should also bear in mind that before my right hon. Friend has the power to do that, he must come to the House. Therefore, while it is true that we want to enable the corporations to have some commercial flexibility to respond to new activities or to changes in the economy, as my right hon. Friend the Member for Sunderland, North said, it is also true that we want to maintain and to keep parliamentary approval.
Having said that, I hope that my right hon. and hon. Friends will accept Amendments Nos. 4 and 8 and that they will reject the Opposition amendments as having no intention other than to make sure that the corporations will be nobbled, shackled and hamstrung in a very restrictive way even before they start to operate.

Mr. Ian Lloyd: The hon. Gentleman has more or less implied that it is the Government's wish that there should be parliamentary approval. Does he regard the extension into a major sector of another industry as normal commercial freedom? Before nationalising an industry, all Governments since the war have thought it necessary to bring a major Bill before Parliament. Why should it now be sufficient to do this by Statutory Instrument?

Mr. Huckfield: I get a little tired of rehearsing the same arguments to the hon. Gentleman. When his own party nationalised Rolls-Royce, it enabled Rolls-Royce to change its memoranda and its articles without coming to the House for legislation.

Mr. Tom King: I congratulate the Under-Secretary on his reply to the last intervention by my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd), because it was the first time that he has not started to reply by saying that he was at a loss to understand something As we listened to his two speeches, my hon. Friends and I came to the conclusion that he did not understand anything about

our amenments. The way in which he began was a Freudian slip.
The point that I was trying to make in my opening speech is the point that the Under-Secretary has totally failed to understand. The right hon. Member for Sunderland, North (Mr. Willey) was not present when I spoke earlier, but he referred to this as an infantile debate. I was not aware that he heard the opening speeches, and that was not my impression of the other speeches.
The question that I should like one Labour Member to answer, if Labour Members do not wish us to press the amendment, is how one can genuinely believe in a fixed frontier between the public and the private sector and yet include powers in a Bill such as this allowing for the continual advance of that frontier and the continual encroachment into the private sector and enlargement of the public sector without there being any formal and considered approach to this problem. The inevitable result will be pressures arising from loss of jobs, from worries about employment and the fact that the public sector will spread yet wider into related activities in industry.
8.0 p.m.
I hope that the Secretary of State will take this on board. Perhaps the Under-Secretary of State will talk to him because, with respect, he did not seem to understand the point that I was making. The Minister must know that there are potential investors who are concerned about the threats of nationalisation. He and his Department should do all they can, in the present circumstances, to encourage inward investment in this country. That was the policy which the previous Conservative Government followed and I hope that he and his Department are following it as well.
The fact that nationalisation can be accompanied by quite inadequate terms of compensation for assets acquired is a deterrent to the potential investment in this country. We are concerned to see a successful economy in this country, but unless any sort of power, with yet further enlargement of the public sector, is properly constrained we shall not see the increase in investment that we all want to see. For this reason, I hope that my right hon. and hon. Friends will support the amendment in the Lobby.

Question put, That the amendment be made:—

The House divided: Ayes 279, Noes 315.

Division No. 294.
AYES
[8.00 p.m.


Adley, Robert
Gardiner, George (Reigate)
Madel, David


Aitken, Jonathan
Gardner, Edward (S Fylde)
Marshall, Michael (Arundel)


Alison, Michael
Gilmour, Sir John (East Fife)
Marten, Neil


Amery, Rt Hon Julian
Glyn, Dr Alan
Mates, Michael


Arnold, Tom
Godber, Rt Hon Joseph
Mather, Carol


Atkins, Rt Hon H. (Spelthorne)
Goodhart, Philip
Maude, Angus


Awdry, Daniel
Goodhew, Victor
Maudling, Rt Hon Reginald


Baker, Kenneth
Goodlad, Alastair
Mawby, Ray


Banks, Robert
Gorst, John
Maxwell-Hyslop, Robin


Beith, A. J.
Gow, Ian (Eastbourne)
Mayhew, Patrick


Bell, Ronald
Gower, Sir Raymond (Barry)
Meyer, Sir Anthony


Bennett, Sir Frederic (Torbay)
Grant, Anthony (Harrow C)
Miller, Hal (Bromsgrove)


Bennett, Dr Reginald (Fareham)
Gray, Hamish
Mills, Peter


Berry, Hon Anthony
Griffiths, Eldon
Miscampbell, Norman


Biffen, John
Grimond, Rt Hon J.
Mitchell, David (Basingstoke)


Biggs-Davison, John
Grist, Ian
Moate, Roger


Blaker, Peter
Grylls, Michael
Molyneaux, James


Body, Richard
Hall, Sir John
Monro, Hector


Boscawen, Hon Robert
Hall-Davis, A. G. F.
Montgomery, Fergus


Bottomley, Peter
Hamilton, Michael (Salisbury)
Moore, John (Croydon C)


Bowden, A. (Brighton, Kemptown)
Hampson, Dr Keith
More, Jasper (Ludlow)


Boyson, Dr Rhodes (Brent)
Hannam, John
Morgan, Geraint


Bradford, Rev Robert
Harrison, Col Sir Harwood (Eye)
Morgan-Giles, Rear-Admiral


Braine, Sir Bernard
Harvie Anderson, Rt Hon Miss
Morris, Michael (Northampton S)


Brittan, Leon
Hastings, Stephen
Morrison, Charles (Devizes)


Brocklebank-Fowler, C.
Havers, Sir Michael
Morrison, Hon Peter (Chester)


Brotherton, Michael
Hawkins, Paul
Mudd, David


Brown, Sir Edward (Bath)
Hayhoe, Barney
Neave, Airey


Bryan, Sir Paul
Heath, Rt Hon Edward
Nelson, Anthony


Buchanan-Smith, Alick
Heseltine, Michael
Neubert, Michael


Buck, Antony
Hicks, Robert
Newton, Tony


Budgen, Nick
Higgins, Terence L.
Normanton, Tom


Bulmer, Esmond
Holland, Philip
Nott. John


Burden, F. A.
Hooson, Emlyn
Onslow, Cranley


Butler, Adam (Bosworth)
Hordern, Peter
Oppenheim, Mrs Sally


Carlisle, Mark
Howe, Rt Hon Sir Geoffrey
Osborn, John


Chalker, Mrs Lynda
Howell, David (Guildford)
Page, John (Harrow West)


Channon, Paul
Howell, Ralph (North Norflok)
Page, Rt Hon R. Graham (Crosby)


Churchill, W. S.
Howells, Geraint (Cardigan)
Pardoe, John


Clark, Alan (Plymouth, Sutton)
Hunt, David (Wirral)
Parkinson, Cecil


Clark, William (Croydon S)
Hunt, John (Bromley)
Penhaligon, David


Clarke, Kenneth (Rushcliffe)
Hurd, Douglas
Percival, Ian


Clegg, Walter
Hutchison, Michael Clark
Pink, R. Bonner


Cockcrott, John
Irving, Charles (Cheltenham)
Price, David (Eastleigh)


Cooke, Robert (Bristol W)
James, David
Prior, Rt Hon James


Cope, John
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Pym, Rt Hon Francis


Cordle, John H.
Jessel, Toby
Raison, Timothy


Cormack, Patrick
Johnson Smith, G. (E Grinstead)
Rathbone, Tim


Corrie, John
Johnston, Russell (Inverness)
Rawlinson, Rt Hon Sir Peter


Costain, A. P.
Jones, Arthur (Daventry)
Rees, Peter (Dover &amp; Deal)


Critchley. Julian
Jopling, Michael
Renton, Rt Hon Sir D. (Hunts)


Crouch, David
Joseph, Rt Hon Sir Keith
Renton, Tim (Mid-Sussex)


Crowder, F. P.
Kaberry, Sir Donald
Rhys Williams, Sir Brandon


Davies, Rt Hon J. (Knutsford)
Kellett-Bowman, Mrs Elaina
Ridley, Hon Nicholas


Dean, Paul (N Somerset)
Kershaw, Anthony
Ridsdale, Julian


Dodsworth, Geoffrey
Kimball, Marcus
Rifkind, Malcolm


Douglas-Hamilton, Lord James
King, Evelyn (South Dorset)
Roberts, Michael (Cardiff NW)


Drayson, Burnaby
King, Tom (Bridgwater)
Roberts, Wyn (Conway)


du Cann, Rt Hon Edward
Kirk, Sir Peter
Rodgers, Sir John (Sevenoaks)


Dunlop, John
Kitson, Sir Timothy
Ross, Stephen (Isle of Wight)


Durant, Tony
Knight, Mrs Jill
Ross, William (Londonderry)


Dykes, Hugh
Knox, David
Rossi, Hugh (Hornsey)


Eden, Rt Hon Sir John
Lamont, Norman
Rost, Peter (SE Derbyshire)


Edwards, Nicholas (Pembroke)
Lane, David
Royle, Sir Anthony


Elliott, Sir William
Langford-Holt, Sir John
Sainsbury, Tim


Emery, Peter
Latham, Michael (Melton)
St. John-Stevas, Norman


Eyre, Reginald
Lawrence, Ivan
Scott, Nicholas


Fairgrieve, Russell
Lawson, Nigel
Scott-Hopkins, James


Farr, John
Le Marchant, Spencer
Shaw, Giles (Pudsey)


Fell, Anthony
Lewis, Kenneth (Rutland)
Shaw, Michael (Scarborough)


Finsberg, Geoffrey
Lloyd, Ian
Shelton, William (Streatham)


Fletcher, Alex (Edinburgh N)
Loveridge, John
Shepherd, Colin


Fletcher-Cooke, Charles
Luce, Richard
Shersby, Michael


Forman, Nigel
McCrindle, Robert
Silvester, Fred


Fowler, Norman (Sutton C'f'd)
McCusker, H.
Sims, Roger


Fox, Marcus
Macfarlane, Neil
Sinclair, Sir Roger


Fraser, Rt Hon H. (Stafford &amp; St)
MacGregor, John
Skeet, T. H. H.


Freud, Clement
Macmillan, Rt Hon M. (Farnham)
Smith, Dudley (Warwick)


Fry, Peter
McNair-Wilson, M. (Newbury)
Speed, Keith


Galbraith, Hon T. G. D.
McNair-Wilson, P. (New Forest)
Spence, John




Spicer, Jim (W Dorset)
Temple-Morris, Peter
Walters, Dennis


Spicer, Michael (S Worcester)
Thatcher, Rr Hon Margaret
Warren, Kenneth


Sproat, Iain
Townsend, Cyril D.
Weatherill, Bernard


Stainton, Keith
Trotter, Neville
Wells, John


Stanbrook, Ivor
Tugendhat, Christopher
Whitelaw, Rt Hon William


Stanley, John
van Straubenzee, W. R.
Wiggin, Jerry


Steel, David (Roxburgh)
Vaughan, Dr Gerard
Winterton, Nicholas


Steen, Anthony (Wavertree)
Viggers, Peter
Wood, Rt Hon Richard


Stewart, Ian (Hitchin)
Wainwright, Richard (Colne V)
Young, Sir G. (Ealing, Acton)


Stokes, John
Wakenham, John
Younger, Hon George


Stradling Thomas, J.
Walder, David (Clitheroe)



Tapsell, Peter
Walker, Rt Hon P. (Worcester)
TELLERS FOR THE AYES:


Taylor, R. (Croydon NW)
Walker-Smith, Rt Hon Sir Derek
Mr. W. Benyon and


Taylor, Teddy (Cathcart)
Wall, Patrick
Mr. Jim Lester.


Tebbit, Norman






NOES


Abse, Leo
Dean, Joseph (Leeds West)
Irving, Rt Hon S. (Dartford)


Allaun, Frank
de Freitas, Rt Hon Sir Geoffrey
Jackson, Colin (Brighouse)


Anderson, Donald
Dell, Rt Hon Edmund
Jackson, Miss Margaret (Lincoln)


Archer, Peter
Dempsey, James
Janner, Greville


Armstrong, Ernest
Doig, Peter
Jay, Rt Hon Douglas


Ashley, Jack
Dormand, J. D.
Jenkins, Hugh (Putney)


Ashton, Joe
Douglas-Mann, Bruce
Jenkins, Rt Hon Roy (Stechford)


Atkins, Ronald (Preston N)
Duffy, A. E. P.
John, Brynmor


Atkinson, Norman
Dunn, James A.
Johnson, James (Hull West)


Bagier, Gordon A. T.
Dunnett, Jack
Johnson, Walter (Derby S)


Bain, Mrs Margaret
Dunwoody, Mrs Gwyneth
Jones, Barry (East Flint)


Barnett, Guy (Greenwich)
Eadie, Alex
Jones, Dan (Burnley)


Barnett, Rt Hon Joel (Heywood)
Edge, Geoff
Judd, Frank


Bates, Alf
Edwards, Robert (Wolv SE)
Kaufman, Gerald


Bean, R. E.
Ellis, John (Brigg &amp; Scun)
Kelley, Richard


Benn, Rt Hon Anthony Wedgwood
Ellis, Tom (Wrexham)
Kerr, Russell


Bennett, Andrew (Stockport N)
English, Michael
Kilroy-Silk, Robert


Bidwell, Sydney
Ennals, David
Kinnock, Neil


Bishop, E. S.
Evans, Fred (Caerphilly)
Lambie, David


Blenkinsop, Arthur
Evans, Gwynfor (Carmarthen)
Lamborn, Harry


Boardman, H.
Evans, Ioan (Aberdare)
Lamond, James


Booth, Rt Hon Albert
Evans, John (Newton)
Latham, Arthur (Paddington)


Boothroyd, Miss Betty
Ewing, Harry (Stirling)
Leadbitter, Ted


Bottomley, Rt Hon Arthur
Ewing, Mrs Winifred (Moray)
Lee, John


Boyden, James (Bish Auck)
Faulds, Andrew
Lestor, Miss Joan (Eton &amp; Slough)


Bradley, Tom
Fernyhough, Rt Hon E.
Lever, Rt Hon Harold


Bray, Dr Jeremy
Fitch, Alan (Wigan)
Lewis, Ron (Carlisle)


Brown, Hugh D. (Provan)
Flannery, Martin
Lipton, Marcus


Brown, Robert C. (Newcastle W)
Fletcher, L. R. (Ilkeston)
Litterick, Tom


Brown, Ronald (Hackney S)
Fletcher, Ted (Darlington)
Lomas, Kenneth


Buchan, Norman
Foot, Rt Hon Michael
Loyden, Eddie


Buchanan, Richard
Ford, Ben
Luard, Evan


Butler, Mrs Joyce (Wood Green)
Forrester, John
Lyons, Edward (Bradford W)


Callaghan, Rt Hon J. (Cardiff SE)
Fowler, Gerald (The Wrekin)
Mabon, Dr J. Dickson


Callaghan, Jim (Middleton &amp; P)
Fraser, John (Lambeth, N'w'd)
McCartney, Hugh


Campbell, Ian
Freeson, Reginald
MacCormick, Iain


Canavan, Dennis
Garrett, John (Norwich S)
McDonald, Dr Oonagh


Cant, R. B.
Garrett, W. E. (Wallsend)
MacFarquhar, Roderick


Carmichael, Neil
George, Bruce
McGuire, Michael (Ince)


Carter-Jones, Lewis
Gilbert, Dr John
Mackenzie, Gregor


Cartwright, John
Ginsburg, David
Mackintosh, John P.


Castle, Rt Hon Barbara
Golding, John
Maclennan, Robert


Clemitson, Ivor
Gould, Bryan
McMillan, Tom (Glasgow C)


Cocks, Michael (Bristol S)
Gourlay, Harry
McNamara, Kevin


Cohen, Stanley
Graham, Ted
Madden, Max


Coleman, Donald
Grant, George (Morpeth)
Magee, Bryan


Colquhoun, Ms Maureen
Grant, John (Islington C)
Mahon, Simon


Concannon, J. D.
Grocott, Bruce
Mallalleu, J. P. W.


Conlan, Bernard
Hamilton, W. W. (Central Fife)
Marks, Kenneth


Cook, Robin F. (Edin C)
Hardy, Peter
Marquand, David


Corbett, Robin
Harrison, Walter (Wakefield)
Marshall, Dr Edmund (Goole)


Cox, Thomas (Tooting)
Hart, Rt Hon Judith
Marshall, Jim (Leicester S)


Craigen, J. M. (Maryhill)
Hattersley, Rt Hon Roy
Mason, Rt Hon Roy


Crawford, Douglas
Hatton, Frank
Maynard, Miss Joan


Crawshaw, Richard
Hayman, Mrs Helene
Meacher, Michael


Cronin, John
Healey, Rt Hon Denis
Mellish, Rt Hon Robert


Crosland, Rt Hon Anthony
Heffer, Eric S.
Mendelson, John


Crowther, Stan (Rotherham)
Hooley, Frank
Mikardo, Ian


Cryer, Bob
Horam, John
Millan, Bruce


Cunningham, G. (Islington S)
Howell, Rt Hon Denis (B'ham, Sm H)
Miller, Dr M. S. (E Kilbride)


Cunningham, Dr J. (Whiteh)
Hoyle, Doug (Nelson)
Miller, Mrs Millie (Ilford N)


Dalyell, Tam
Huckfield, Les
Mitchell, R. C. (Soton, Itchen)


Davidson, Arthur
Hughes, Rt Hon C. (Anglesey)
Moonman, Eric


Davies., Bryan (Enfield N)
Hughes, Mark (Durham)
Morris, Alfred (Wythenshawe)


Davies, Denzil (Llanelli)
Hughes, Robert (Aberdeen N)
Morris, Charles R. (Openshaw)


Davies, Ifor (Gower)
Hughes, Roy (Newport)
Morris, Rt Hon J. (Aberavon)


Davis, Clinton (Hackney C)
Hunter, Adam
Moyle, Roland


Deakins, Eric
Irvine, Rt Hon Sir A. (Edge Hill)
Mulley, Rt Hon Frederick







Murray, Rt Hon Ronald King
Sandelson, Neville
Tuck, Raphael


Newens, Stanley
Sedgemore, Brian
Urwin, T. W.


Noble, Mike
Selby, Harry
Varley, Rt Hon Eric G.


Oakes, Gordon
Shaw, Arnold (Ilford South)
Wainwright, Edwin (Dearne V)


Ogden, Eric
Sheldon, Robert (Ashton-u-Lyne)
Walden, Brian (B'ham, L'dyw'd)


O'Halloran, Michael
Shore, Rt Hon Peter
Walker, Harold (Doncaster)


Orbach, Maurice
Short, Rt Hon E. (Newcastle C)
Walker, Terry (Kingswood)


Orme, Rt Hon Stanley
Short, Mrs Renée (Wolv NE)
Ward, Michael


Ovenden, John
Silkin, Rt Hon John (Deptford)
Watkins, David


Owen, Dr David
Silkin, Rt Hon S. C. (Dulwich)
Watkinson, John


Padley, Walter
Sillars, James
Watt, Hamish


Palmer, Arthur
Silverman, Julius
Weetch, Ken


Park, George
Skinner, Dennis
Weitzman, David


Parker, John
Small, William
Wellbeloved, James


Parry, Robert
Smith, John (N Lanarkshire)
Welsh, Andrew


Pavitt, Laurie
Snape, Peter
White, Frank R. (Bury)


Peart, Rt Hon Fred
Spearing, Nigel
White, James (Pollok)


Pendry, Tom
Spriggs, Leslie
Whitehead, Phillip


Perry, Ernest
Stallard, A. W.
Whitlock, William


Phipps, Dr Colin
Stewart, Donald (Western Isles)
Wigley, Dafydd


Prentice, Rt Hon Reg
Stewart, Rt Hon M. (Fulham)
Willey, Rt Hon Frederick


Prescott, John
Stoddart, David
Williams, Alan (Swansea W)


Price, C (Lewisham W)
Stott, Roger
Williams, Alan Lee (Hornch'ch)


Price, William (Rugby)
Strang, Gavin
Williams, Rt Hon Shirley (Hertford)


Radice, Giles
Strauss, Rt Hon G. R.
Williams, Sir Thomas


Rees, Rt Hon Merlyn (Leeds S)
Summerskill, Hon Dr Shirley
Wilson, Alexander (Hamilton)


Reid, George
Swain, Thomas
Wilson, Gordon (Dundee E)


Richardson, Miss Jo
Taylor, Mrs Ann (Bolton W)
Wilson, Rt Hon (Huyton)


Roberts, Albert (Normanton)
Thomas, Dafydd (Merioneth)
Wilson, William (Coventry SE)


Roberts, Gwilym (Cannock)
Thomas, Jeffrey (Abertillery)
Wise, Mrs Audrey


Robinson, Geoffrey
Thomas, Mike (Newcastle E)
Woodall, Alec


Roderick, Caerwyn
Thomas, Ron (Bristol NW)
Woof, Robert


Rodgers, George (Chorley)
Thompson, George
Wrigglesworth, Ian


Rodgers, William (Stockton)
Thorne, Stan (Preston South)
Young, David (Bolton E)


Rooker, J. W.
Tierney, Sydney



Roper, John
Tinn, James
TELLERS FOR THE NOES:


Rose, Paul B.
Tomlinson, John
Mr. Joseph Harper and


Ross, Rt Hon W. (Kilmarnock)
Torney, Tom
Mr. James Hamilton.


Rowlands, Ted

Question accordingly negatived.

Amendment made: No. line 24, at end insert—
'(5A) The power to make an order under subsection (5) above includes power to vary or revoke any such order previously made, and no order shall be made under that subsection unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.'.—[Mr. Varley.]

The Secretary of State for Industry (Mr. Eric G. Varley): I beg to move Amendment No. 5, in page 4, line 36, leave out from 'Act' to 'in' in line 38 and insert
'it shall be the duty of each Corporation to promote industrial democracy in a strong and organic form'.

Mr. Deputy Speaker (Bryant Godman Irvine): With this we may take the following amendments:
(a), after 'democracy', insert
'in which adequate powers of decision-making are shared by the Corporations and their subsidiaries with members of the relevant workforces'.
(b), at end, insert
'on the basis of one employee, one vote'.
Government Amendment No. 6, in page 4, line 39, at end insert—
'(7A) It shall be the duty of each Corporation to enter within 3 months of the relevant

vesting date into consultation with the relevant trade unions as to the methods which it should adopt for the purpose of carrying out its duty under subsection (7) above'.
(a), at end insert
'and to come to a conclusion about the appropriate form of industrial democracy in each relevant case within one year of the relevant vesting date.'
(b), at end add
'and within twelve months of the relevant vesting day each Corporation shall make a report on the consultations to the Secretary of State who shall lay before each House of Parliament a copy thereof and may, after doing so and after considering the report and consulting the Corporation concerned and the relevant trade unions, give the Corporation such directives as he considers appropriate.'.
(c), leave out 'the relevant trade unions' and insert 'its employees'
(d), at end insert
'(7B) It shall further be the duty of each Corporation at the time of entering into consultation pursuant to the foregoing subsection, to consult with those parts of the concerned work force which are not represented by any relevant trade union'.
No. 213, in page 4, line 39, at end insert:
'(7B) This section shall be construed as imposing on each Corporation a liability enforceable by proceedings before a court to create joint management and employees consultative machinery.'.


No. 305, in Clause 3, page 6, line 11, after 'may', insert:
'after consultations with the relevant trade unions concerned and'.
Government Amendment No. 15, in Clause 5, page 7, line 35, leave out from 'organised' to 'and' in line 39 and insert:
',taking account of the desirability of promoting the largest degree of decentralisation of management consistent with the proper discharge of its functions, and what steps are necessary in order effectively to promote industrial democracy in its undertakings and the undertakings of its wholly owned subsidiaries'.
(a), after 'functions', insert:
'and taking account of the functions already exercised at yard and factory levels'.
(b), after 'functions', insert:
'and in particular trading through subsidiary companies'.
(c), after 'functions', insert:
'including forward planning, manpower, market potential, research and development, exports and imports, and diversification'.
No. 271, in page 8, line 3, leave out 'any relevant trade union' and insert:
'such organisations including relevant trade unions as appear to it to represent substantial proportions of the persons or of any class of persons in the employment of the Corporation or any of its wholly owned subsidiaries'.
No. 315, in page 8, line 3, at end insert:
'(4) Each Corporation shall be required to vest the control of one or more of its subsidiaries in the employees of that subsidiary as an application of the principle of workers' control'.
No. 226, in page 8, line 16, leave out:
greatest efficiency in the management'
and insert:
'largest degree of decentralisation of management and the most effective measures to promote industrial democracy consistent with the most effecient organisation'.
No. 256, in Clause 6, page 8, line 21, leave out 'any relevant trade union' and insert 'its employees'.
No. 257, in page 8, line 22, leave out 'any such trade union' and insert 'its employees'.
No. 272, in page 8, line 25, at end insert—
'(1A) It shall further be the duty of each Corporation to seek consultations with other organisations not being relevant trade unions, as appear to it to represent substantial proportions of the persons or of any class of persons in the employment of the Corporation or any of its wholly owned subsidiaries in

respect of the establishment and maintenance of machinery for the purposes specified in paragraphs (c) and (d) in subsection (2) below'.
No. 277, in page 8, line 29, at end insert:
who are members of the trade union engaged in such negotiations'.
No. 273, in page 8, line 43, at end insert—
'(4) Nothing in this section or in section 5 above shall be construed as prohibiting either Corporation or any wholly owned subsidiary of either Corporation from seeking consultation by such means and in such manner as it thinks fit with any individual employee or groups of such employees on any of the matters in respect of which it is by this section and by section 5 above required to seek consultation with relevant trade unions'.
No. 211, in Clause 7, page 9, line 1, after 'Corporation', insert:
'after consulting any relevant trade union,'.
No. 212, in page 9, line 8, at end insert:
'(bb) employment of persons;'.
No. 319, in Clause 54, page 71, line 23, leave out from 'union' to end of line 32 and insert:
'affiliated to the Confederation of Shipbuilding and Engineering Unions'.
We may also discuss Government Amendments Nos. 7, 317, 318, 319, 320 and 321, 16, 322, 17, 323, 18, 36 and 37.

8.15 p.m.

Mr. Varley: It will be convenient if I confine my remarks to the Government amendments. If the House gives me leave to speak again, I can refer to the other amendments that are taken in the group, to which other hon. Members will speak.
The other amendments are most sensibly considered if we look first at those amendments that seek to prescribe specific ways of developing industrial democracy and decentralisation, and then turn to those amendments that affect the organisations that will take part in consultations on industrial democracy, organisation and machinery for settling terms and conditions of employment under Clauses 2, 5 and 6.
This group of very important amendments that we are putting forward fulfils two major Government commitments made in Committee, relating to industrial democracy and decentralisation. They are grouped because, for reasons of drafting convenience, the very important


requirement on decentralisation comes within the same amendment as one of the several industrial democracy points. There are, nevertheless, two distinct and highly significant initiatives being taken by the Government in this group of amendments.
To deal first with industrial democracy, these amendments are designed to strengthen the industrial democracy provisions in the Bill. We have made clear that this is a subject to which we attach the highest importance, and we have brought forward these changes after wide-ranging consultations. They are intended to create a favourable environment in which industrial democracy may grow and flourish. But it must develop organically to reflect the views and wishes of those who work in each industry, and for this reason we want to avoid any requirement for it to take a particular form. The possible forms of industrial democracy are many and varied, but for our amendments to choose between them and attempt to impose a particular structure would be contrary to the very idea of industrial democracy, because we should be imposing our ideas on those in the industry.
We have strengthened the formula in the original Bill by imposing a duty on both corporations to promote industrial democracy in a strong and organic form. As my hon. Friend explained in Committee, this could give rise to legal problems if the courts were required to adjudicate on industrial democracy. Amendment No. 6, therefore, provides that no duty of either corporation shall be enforceable by proceedings before a court of law. The provision applies to the whole clause, because we wished to follow the precedent of the Iron and Steel Act 1949 as revived by the Iron and Steel Act 1967.
But our amendments are a great deal more than the expression of our hopes. Although we are not imposing a structure, we are introducing procedures to see that progress is made within a reasonable period and that some kind of action is taken. We are therefore requiring each corporation to consult relevant trade unions within three months about the methods of promoting industrial democracy, which is the purpose of Amendment

No. 6. Each corporation also has a duty to take into account industrial democracy in designing its organisation. That will ensure that action is taken, and we shall be able to see just what progress is being made, because Amendments Nos. 36 and 37 require the corporations to report on this annually.
Two other amendments in this group should also help to promote industrial democracy by involving relevant trade unions more closely in the industry. Amendments Nos. 211 and 212 provide that unions are to be consulted before each corporation formulates its corporate plan which must include the subject of most concern to the unions—employment. We have also strengthened the wording in Clause 6, which requires the corporations to consult relevant trade unions about the machinery for settling terms and conditions of employment.
Although our Amendment No. 15 on decentralisation is, for drafting reasons, inseparable from those on industrial democracy, both reflect our concern to improve the quality of decisions taken by the industries. An important way of doing that is to see that those in the industry are involved in its development, and our amendments on industrial democracy should help to achieve this.

Mr. Ronald Bell: Before the right hon. Member leaves that point will he tell the House what is meant by "organic growth of industrial democracy"? That is a strange phrase. It must mean something.

Mr. Varley: I agree that it is a difficult concept to understand, and the hon. and learned Gentleman is right to draw attention to it. Neither he nor I had the pleasure of attending the 58 sittings of the Committee. In that term we are trying to avoid setting down a precise formula for industrial democracy. It is better that discussions take place within the two corporations, so that industrial democracy grows from the bottom. It expresses the will of those on both sides of the industry. It would be wrong for the Government to try to impose their view. That is all that we are expressing in that amendment.
But we also believe that decisions should be taken as close as possible to the point of production, so far as that is consistent with the other objectives of


public ownership. For that reason we are introducing a requirement on the corporations that in formulating their organisational structure they should promote the largest degree of decentralisation consistent with the proper discharge of their functions.
We emphasised in Committee the importance that we attach to decentralisation, and we consider that this amendment will ensure that decentralisation is given due weight. Both organising committees have clearly stated their intention to decentralise to the greatest possible extent, and to have only small head office organisations, with as little bureaucracy as possible. That is in line with the views of all of us, on both sides of the House; in line with the views of the workers in the two industries; and in line with the interests of the efficient and enterprising management of the industries.
The special circumstances of the shipbuilding industry, with its particular structure and importance in the regional context, has led the Government to table additional amendments covering British Shipbuilders. Our substantive proposal is in Amendment No. 320. It provides for British Shipbuilders to seek the largest degree, consistent with the proper discharge of its functions, of decentralisation of management and decision-taking to separate profit centres in the shipbuilding and ship repairing areas of Great Britain and in particular, of Scotland and Wales and without prejudice to the generality of the foregoing in relation to sales, pricing, production, the formulation and implementation of investment programmes, manpower planning and management, industrial relations and responsibility for financial performance.
In tabling this amendment the Government recognise the special needs of the industries that will come into public ownership under British Shipbuilders, the vital importance of these industries to the regions in which they are concentrated and the aspirations of Scotland and Wales and the regions in England for decentralisation of decision-making to as great an extent as possible.
The organising committee for British Shipbuilders has publicly confirmed that it will decentralise as much as possible. The Committee has made an excellent start to its task of preparing for vesting and has visited all the yards and works

in the industry—with one exception—to meet people at all levels to hear their views.

Mr. R. C. Mitchell: I hope that my right hon. Friend will not think me frivolous, but in view of the importance of exports in various sections of the shipbuilding industry, should not such organisations be allowed to retain their own name alongside that of British Shipbuilders? For example, should not Vosper Thornycroft be allowed to retain its name and to include it in British Shipbuilders, because its name is so well known throughout the world?

Mr. Varley: I do not regard that suggestion as frivolous. It is a worthy suggestion, and I know that it is under consideration by the Organising Committee of British Shipbuilders. I am advised that events are almost certain to happen in the way in which my hon. Friend suggests.
I was saying that the Organising Committee has made an excellent start. It already has views on the extent to which it will seek to decentralise to separate profit centres, although it is not yet in a position to put forward firm proposals on the structure of the organisation.

Mr. Robert Adley: Following the suggestion made by the hon. Member for Southampton, Itchen (Mr. Mitchell), should not these companies be allowed not only to retain their names but to retain their total independence of decision-making?

Mr. Varley: That does not follow, and the hon. Gentleman knows it. The Government have reviewed with the organising committee, in fulfilment of the undertaking given by my right hon. Friend the Lord President of the Council in the House of Commons on 29th June, their own amendment on decentralisation and the amendments tabled by the Scottish National Party. I know that the hon. Member for Dundee, East (Mr. Wilson) will be speaking to those amendments, and perhaps I can reserve my comments on that until we have heard his remarks.
The new amendment which has now been agreed with the Organising Committee makes it quite clear that British Shipbuilders will seek to decentralise real


powers of management and decision taking to separate profit centres in the shipbuilding and ship repairing areas. The management of these profit centres will have responsibility for their financial performance and will have the necessary authority to fulfil that responsbility. But British Shipbuilders will of course have overall responsibility.
There must be flexibility in the provisions of the Bill to allow for differences between industries—shipbuilding, ship repair and engine building—and to permit British Shipbuilders to establish an initial organisational structure to meet these differences and to adapt its structure from time to time to meet changing circumstances in the shipbuilding and ship repairing areas of Great Britain and in particular of Scotland and Wales. There may be companies, either separate or grouped together or in divisions. The first report will have to be will be for British Shipbuilders to consider which of these best meets the particular circumstances.
8.30 p.m.
In reporting to me its conclusions on organisation, British Shipbuilders will also be required to report on the actions it will take to implement these conclusions. The first report will have to be made within six months after vesting. The reports will be laid before Parliament.
I see these amendments paving the way for the revitalisation of the industry. British Shipbuilders will meet the need for a coherent overall strategy in terms of providing essential planning, funds for investment, taking the lead on introducing industrial democracy, co-ordinating research and marketing, introducing new designs and so on. It is the policy of the organising committee that within this framework the individual profit centres will have real powers and responsibility for the efficiency, success and profit of their operations. This is the best way to insure against possible adverse effects of over-centralisation on regional economies. Any rigid form of regional organisation structure which might interpose an unnecessary intermediary body between the small central corporation and the most efficient form of local profit centre is more likely to do harm than good to the region concerned.
These are important amendments, and we believe that we have gone a great deal of the way to meet some of the suggestions that were made in Committee and to implement Government assurances. We believe that this is the right way to proceed, and we hope that the House will support the amendments.

Mr. Tom King: I still do not understand the wording of the amendments. It is a pity that the Secretary of State could not give a satisfactory reply to the question asked of him by my hon. and learned Friend the Member for Beaconsfield (Mr. Bell.) A committee is now determining exactly what the phrase "industrial democracy" means, and I hope that its members will seek to avoid the Government's prejudiced terms of reference. There is no definition of "industrial democracy" set out in previous Bills. The phrase is still undefined and we do not know what it means.
We certainly have no idea of the meaning of the word "organic" in this context. However, whatever it means, it is so vague that it must be a good thing The Government are obviously proceeding on the basis that the phrase means all things to all men—in other words, everybody can read what he likes into it. Since it concerns democracy, it must be a good thing. But at the end of all this we still do not understand what is meant by these amendments.
The right hon. Gentleman the Secretary of State for Industry said that we had discussed this matter in Committee. He went on to say that the Government had sought to put these duties into legislation. I am not quite sure whether we achieve much by adding them in this legislative form. I know that the Government have gone as far as they can by the wording of the Act—

Mr. A. P. Costain: What happens if this so-called democracy is not achieved?

Mr. King: My hon. Friend, in his usual percipient way, has anticipated a point that I was about to make, not only on this aspect but in relation to decentralisation as well.
A study of the Bill will show that there are duties and responsibilities, but they are all very carefully qualified, because the Secretary of State has some intelligent


advisers who have warned him that if unquantifiable and quite undefinable matters are put in, there must be qualifications which allow even for the non-performance of what cannot be quantified. Therefore, we have total protection in this form.
But there is one respect in which we take exception to the proposals which have been put forward. I am sorry to introduce this rather sharp note into the otherwise totally cynical atmosphere which suffuses the House at the moment concerning the real merit of the Government's amendments. In their approach to this problem the Government have once again made it a duty of the corporation to consult, but have limited this entirely to relevant trade unions.
It is a well-known fact that a considerable number of people working in these industries do not belong to trade unions. Therefore, once again there are first-class and second-class citizens. Any member of a relevant trade union is regarded as a first-class citizen, entitled to consultation, but anyone who is not a member of a trade union is not consulted, and his views are not taken into account. This is a fundamental point. We believe that all employees should be entitled to consultation. We believe that the interests of all employees should be considered. Therefore, we have what we believe is an amendment of fundamental importance, namely, to change "the relevant trade unions" into "its employees". This would ensure that there are not large numbers of employees of both corporations who are not consulted at all. In this situation we feel it is only proper that the amendment should be made.

Mr. Michael McNair-Wilson: Will my hon. Friend agree that to use the term "industrial democracy" and to deny it to a large group of those who are working in industry is simply to make an absolute nonsense of the word "democracy"?

Mr. King: The terms of reference for the Bullock Committee fell into the same trap. It was also meant to be considering the problems of industrial democracy. This is entirely relevant to the terms of reference proposed by the TUC It is quite an unjustifiable attitude for the Government to take.
Even at this late stage, I hope that the Government will fully recognise the interests of all employees. I hope that there will not be very substantial groups of people, equally important to the per-formation of the corporations, who are denied the right of consultation. I look forward to hearing the Secretary of State recognising that point, even at this late hour.
Looking at the second strange collection of words, one wonders whether they mean anything at all or whether this is something devised in order to get the Bill through the Report stage in the House of Commons. Some rather awkward and tiresome points have been brought up by one or two Labour Members, but surely these words are a little remote from the reality of political power.
We now have the great decentralisation amendments—these much-heralded parts of the great package deal by which votes can be not bought but encouraged. Perhaps I might be a little provocative at this moment. Votes can be encouraged at a particular time in order to get the Government over a particular hurdle. We know that there has been meeting after meeting held by the Minister of State in trying to present an agreed case and to persuade people that their interests and the interests of their area can be met. Now we see in legislative form what these amendments add up to.
I do not know how many hon. Members have read the amendments. What do they mean? They say that the Corporation shall take into account the desirability of promoting the largest degree of decentralisation of management consistent with the proper discharge of its functions. That is the qualification. The corporation may say that it can discharge its functions only in a centralised way. In saying that, it will have fulfilled its duty under that qualification. Amendment No. 320 is the main flag-bearer of the decentralisation proposal. We are told that The corporation shall, forthwith after vesting date,
undertake a review of the affairs of the Corporation and its wholly-owned subsidiaries".
The Bill speaks about how they may be efficiently organised and says that there shall be the largest degree of decentralisation consistent with the proper discharge


of the corporation's functions. It must make a report to the Secretary of State on its conclusions. When those conclusions are returned it may say that the proper way for it to discharge its functions is to operate in a more centralised way than hon. Members may have discussed in Committee. However, it will still have carried out the requirements of the Bill.
Let us look at what is likely to happen. I should like to take the Secretary of State through the items involved that may affect the running of the corporation. We shall see how well decentralisation will stand up to that scrutiny. First, let us consider the people employed in the yards. The Minister suggested that there would be different rates in different yards. Does he suggest that employees in different yards would accept lower wage rates if their firms were members of the British Shipbuilders Corporation and if they knew that higher wages were paid in other yards?
If there are different merit scales or bonuses it is inevitable that there will be understandable pressures from shop stewards and union representatives on the lower-paid yards. If the firms are members of the British Shipbuilders Corporation they will ask why workers do not receive the same rates of pay. As a result, centralised wage negotiations will take place. There will be a central fixing of terms of employment.
What will happen about procurement? What will happen about the purchases of materials when the Corporation asks for statistics and evidence of prices paid for bought-in components? What will happen when it discovers that one yard is paying more for its components than other yards? Will that not inevitably lead to central purchasing? There will be a central purchasing department.
What about training? Will training be operated individually yard by yard, large and small? Alternatively, will someone say that it might be more sensible if there were a British shipbuilding training centre in which to conduct training courses for all employees? That matter will also be centralised. None of those steps will be taken vindictively or improperly. All that will follow from the

discharge of the duties of the members of the British Shipbuilding Corporation and the British Aerospace Corporation. All that will happen within the legal requirements of the amendments moved by the Secretary of State.
What will happen about matters such as health and safety, which are the responsibility of corporation companies? Will not someone say that there should be centralised employment, personnel, and health and safety officers? People may say that the Corporation has responsibilities under the Act and that it must ensure that they are fulfilled in all the yards.
There is one more item. What will happen on the marketing side? Are we to have individual sales directors for individual yards flying round the world to different customers spending large amounts on travel? Anyone involved in industry knows how expensive overseas travel is with the increases in air fares.
8.45 p.m.
The corporation will say "Look at the selling costs. It is ludicrous to have somebody from Vospers, somebody from Yarrows, and somebody from Swan Hunter"—if those companies keep their names—"going to see the same customers. This is a waste of time and money. We should have one chap going round." The next thing will be a centralised marketing organisation.
When some of the Secretary of State's hon. Friends rush to him and say "That is not what you said on Report. We thought we should have decentralisation.", he will then turn to British Shipbuilders for an explanation. The corporation will then turn to him and say, "Our selling costs last year were £100,000. We find that if we can get a measure of co-ordination, we can save £50,000 on our selling costs."
The Secretary of State will then be obliged to agree, and his officials will be obliged to advise him that British Shipbuilders is acting correctly within the proper discharge of its functions in having a centralised marketing operation.
When we look at the reality of running a business, we realise that these amendments, which talk about decentralisation and attempt to be all things to all men, just will not work. I am sure that you, Mr. Deputy Speaker, would call me to


order if I were to offer a bet across the Floor of the House. However, having covered four specific areas, if they are not all centralised under the corporation within three years after the Bill becomes law, I shall gladly pay my share of any bet. It is inevitable that centralisation will take place.
We deplore the whole concept of nationalisation. If the industries are to be nationalised, we should prefer decentralisation, but we do not believe that that will happen. Centralisation will inevitably flow from nationalisation.

Mr. Varley: The hon. Gentleman has made the important statement that the Conservative Party is now in favour of the decentralisation of public corporations. If so, will he tell me whether this is a recent view? It will be within the recollection of the House that in 1972 the then Conservative Government brought in the Gas Bill to establish the British Gas Corporation which abolished all the statutory regional organisations, including the statutory regions for Wales and Scotland. I remember it well. The hon. Gentleman has probably made instant policy, because he has told us that the Conservative Party has abandoned the policy that it was following in 1972.

Mr. King: I should not presume to quote the Prime Minister's words of yesterday, but I suggest that the Secretary of State is a little too young to live in the past. The right hon. Gentleman is not comparing like with like in any respect. We are dealing with independent, free-standing commercial operations.

Mr. John Evans: The hon. Gentleman has touched on an extremely important aspect concerning decentralisation. The House will not expect me to deal with the four points he has made but I will take two. First, concerning training on Tyneside, when the yards were individually owned, before the Geddes Report, there was no such thing as training in the yards. People got no training at all. But when Swan Hunter took over they set about introducing a first-class excellent training school at which apprentices in the Swan Hunter group on Tyneside were trained. They were not brought from Teeside which had its own training centre. Secondly, on wage rates in the Swan Hunter group, the hon.

Gentleman will appreciate that there were different wage rates within that group but there was no outrageous pressure from the trade unions to operate at the highest wages within the organisation.

Mr. King: I stand by what I said on wage rates and I shall be very interested to see what happens. The hon. Gentleman has his view and I have mine. My forecast is that throughout the corporation within a short period of time the level of the best will have been reached by everybody. We should like to have seen the independence of the yards preserved. We consider that if decentralisation can be achieved in this field it is desirable but we consider that the Government's amendments are pious in content and likely to prove singularly ineffective. We bitterly deplore the continuing preferential treatment particularly for the relevant trade unions. This is a matter which we shall particularly seek to press later in a Division.

Mr. Frederick Willey: I wish to thank my right hon. Friend the Secretary of State for the amendments that he has put down. I particularly express my appreciation and that of many of my colleagues for the Minister's response to the points that we made on industrial democracy and decentralisation, which were major matters raised from the Government side in Committee. We certainly appreciate the steps that have been taken. On industrial democracy, I believe that one of the reasons why this country is lagging behind other industrial competitors is that we have a Front Bench spokesman who can say that he does not know what industrial democracy means.

Mr. Tom King: That is right.

Mr. Willey: In West Germany, for instance, no responsible politician would say that he did not know what industrial democracy meant, or that he did not know its importance to industrial competitiveness. We have a Committee sitting on this matter now. This reflects on this country. There is no commission in West Germany to determine what industrial democracy is. All our competitors are well ahead of us on matters like industrial democracy and participation. Industrial competition is very strong, and it is about time that we recognised it. It is recognised by the importance of the


amendments now before us, in that they provide procedures for progress.
We have to be very much alive to the importance of industrial democracy to British industry. Here we have an opportunity, at any rate, to get going now, without waiting for the report of the Bullock Committee.

Mr. Norman Tebbit: I much appreciate what the right hon. Gentleman has said, but, as a responsible politician about to cast his vote, will he say what he thinks industrial democracy means in the context of this Bill?

Mr. Willey: I have a very clear concept of what it means in the context of the Bill, but I have not the time to tell hon. Gentlemen opposite—[Interruption.]—because this is not something that can be disposed of in generalities. It will be understood and appreciated at the point of managerial decision. I say no more than that it is because we regard this as a great joke, as something to be resisted at all costs, that we have not achieved the productivity that other countries have. Therefore, if we are to take over responsibility—still speaking only of shipbuilding and ship repair—for industries facing very intense competition, we had better get the same industrial participation and democracy as our competitors have.
Unlike the hon. Member for Bridgwater (Mr. King) I have always argued for decentralisation. This is not peculiar to nationalised industries. There are other corporations of this size. I complained earlier about the infantile discussion that we often have of issues like this. We must consider the problem and the best solution. We have a lot of experience in shipbuilding. Geddes has been mentioned. In Sunderland, a few years ago, we had eight yards. We now have two. We did not follow Geddes. This raises real difficulties in terms of decentralisation. We must face this problem and do the best we can.
The question whether famous names should be preserved with decentralisation is not an easy problem. Famous names have gone from Sunderland—not through the actions of public enterprise but by private enterprise. JLs was a famous shipbuilders. It is difficult to know how important this problem is. We have two of the most famous yards in the country

—Austin & Pickersgill and Sunderland Shipbuilders.
Because I argued for them in Committee, I welcome the words that are now being put into the Bill—the reference to
…decentralisation of management and decison-taking to separate profit centres.
I am being parochial, but I have argued that performance must be related to the position in Austin & Pickersgill and that if Sunderland Shipbuilders remain separate, it must relate to that company too. Perhaps it should also relate to Swan Hunter.
If one is to take a realistic view of an industry that is being taken into public ownership, this is the best way of doing it. One then faces problems. One knows what the risks are. The profit centres must be decentralised and management made as autonomous as possible. Industrial democracy goes very much with decentralisation.
Neither of these matters is easy to work out. We cannot do so here. That is why I declined to give a definition of industrial democracy and would equally decline to define decentralisation.
With the support of the Committee, I got another new principle introduced in the Bill—that we should lay down guidelines on nationalisation; that British Shipbuilders, and the Secretary of State in giving directions, should have regard to regional policy and unemployment. We should say to British Shipbuilders "We shall monitor what you achieve. You must have discussions and agree with the trade unions a pattern of industrial democracy. You must also work out a decentralised structure. Forget about the Tories and the Gas Bill: we are taking an entirely different approach."
Particularly with shipbuilding and ship repairing, this is a vital approach. Initiative and resources at the effective local level of management are absolutely essential if these industries are to compete.

Mr. Deputy Speaker: Order. May I appeal to hon. Members for brevity of speeches. Many hon. Members still wish to speak and I want to try to accommodate as many as possible.

9.0 p.m.

Mr. Adley: This is one of the main and most important stages of the Report


stage of this Bill. No one would deny that industrial democracy and decentralisation are separate subjects. Therefore it is not easy to make one short and concise speech on both of them. What bothers many of us on these Benches is that this Bill will be an Act of Parliament soon and there really should be a legal definition of industrial democracy before that happens.
In my constituency I have been trying, in discussions with trade unionists, to find out their views on industrial democracy. Recently I discussed this with five shop stewards. I was forcing the conversation on to the subject of industrial democracy when one of them asked me whether I minded if we talked about something else. They said they would prefer to discuss immigration!
In the discussion we had on industrial democracy one thing became clear—industrial demoracy means something very different to many British trade unionists from what it means to trade unionists in West Germany and the United States. Many British trade unionists want the power without the responsibility. They want to take part in decisions but they are unwilling to accept any responsibility for the aftermath of the decisions to which they have been a party. This is a dangerous situation, and one which this Bill will promote.
I would hope that if and when industrial democracy really reaches this country it will bring about a change of attitude on the part of both unions and management. Unions particularly should recognise the vital importance of profits in industry. It is important to work towards making a company profitable so that everyone can share the fruits of those profits. [Interruption.] If hon. Members wish to interrupt me I shall gladly give way.

Mr. Deputy Speaker: The hon. Member must just ignore it. That is all.

Mr. Adley: That is very sound advice, particularly when it is related to the contents of the comments coming from across the Floor of the House. I shall ignore them.
Many of us would like to see the elimination of the phrase "both sides of industry", yet that is most unlikely to be achieved by these amendments. Some of these amendments were born in a

frantic few hours, or even less, of discussion between the Lord President of the Council, the Secretary of State and the leaders of the Scottish National Party, which culminated in the speech made so uncharacteristically and read so carefully by the Lord President on 29th June. He told the House, in effect, that he had hacked a deal to keep the Scottish National. Party out of the Lobby; but his words at 9 p.m. that night seemed to have evaporated by 9 o'clock the next morning, if we are to believe what the Scottish National Party has been saying in the past few days. That will surprise nobody. The Lord President's words that night were worked out very carefully, with the connivance of the Secretary of State, and they were intended to mean that the Government would transfer jobs from profitable yards in England to unprofitable yards in Scotland. I think it is extremely unfair to impose this situation on successful yards such as Vosper-Thorneycroft Ltd. in Southampton and Portsmouth which are efficient and effective and have done nothing whatsoever—save being lumbered with a Labour Government—to deserve the unenviable treatment they will receive if the spirit of the agreement between the Lord President, the Secretary of State and the Scottish National Party is carried through.
I suspect that the amendments will lead inevitably to a power struggle between different shipyards in the fight for orders, that commercial considerations will go out of the window and that ultimately the yards which can rustle up the most industrial muscle, probably with the greatest degree of militancy, will get the orders. That is a wholly unsatisfactory way in which to contemplate the future of the British shipbuilding industry.
The hon. Member for Southampton, Itchen (Mr. Mitchell) intervened briefly earlier today and yesterday as well. Just now he was asking for the retention of the name Vosper Thornycroft. From what he said yesterday it is clear that in his heart he knows that the Bill will have a severely damaging effect on the jobs of his constituents. He said yesterday:
One thing which I fear from the setting up of the British Shipbuilding Corporation is that the Bill may allow Ministers to try to put pressure on the corporation to do things which are not commercially correct. It


is right that ships should be built where they can be built most efficiently and not where there is high unemployment, or because some particular area fits in with someone's regional policy. If the shipbuilding industry is to survive, it must be efficient, and it can be efficent only if it is not interfered with from the outside."—[Official Report, 27th July 1976; Vol. 916, c. 336.]
When the hon. Member talks about the interference of Ministers he means not just the inevitable interference surrounding the transfer of jobs, but the interference of Labour Ministers over orders from Brazil, Chile and South Africa which would mean jobs for British shipyard workers. The Vosper Thornycroft customers will be the first to suffer from this political interference which the hon. Member rightly deplored yesterday.
The boilermaker barons of the Tyne, the Clyde and the Wear will deprive the efficient, profitable and vital yards of Hampshire of their work and the shipyard workers of their jobs with inevitable damage to the local economy. I have no doubt that in due course the electors of Southampton will know what to do at the next General Election.
My hon. Friend the Member for Bridgwater (Mr. King) suggested that it might be improper to seek to challenge the views of hon. Members by suggesting a bet, but I would not mind betting 1p for every job plus or minus—the results to go to charity—that one year from the day when the Bill gets a Third Reading there will be fewer, and not more, people actively employed in building ships in Southampton and Portsmouth.
Industrial democracy, like race relations, cannot be imposed by Government legislation. It must grow from seeds planted by those who believe in it. One can impose industrial democracy in a totally Communist oriented society where the organisation concerned can be shielded from international competition. Alternatively, industrial democracy can grow in a free enterprise unit with profit-sharing the obvious motive which can be understood both by management and unions. But these amendments will not achieve any of the Government's intentions, and like the Bill, they are wholly irrelevant to the problems of the shipbuilding industry.

Mr. Deputy Speaker (Sir Myer Galpern): I ask again for brevity. There are still many hon. Members who wish to speak in the debate. Mr. Lambie.

Mr. David Lambie: As a Member who took part in most of the 58 sittings in Committee, I submitted amendments on industrial democracy and devolution of power. I also supported major amendments on those issues put forward by some of my hon. Friends. I am glad that the Government have tabled amendments on Report that take into account the points of view of my right hon. and hon. Friends in Committee.
On the first of the 58 Committee sittings it was my opinion that we should introduce statutory controls over British Aerospace and British Shipbuilders. During the debates in Committee I took the view that there should be statutory controls on industrial democracy and devolution of power, but during consultations with trade union colleagues at shop steward level, and with management of shipyards and aircraft factories, I changed my mind. I now realise that the solution offered by the Government and introduced in the amendments is the correct one.
Industrial democracy must come from the bottom. If it comes from the top, a situation arises similar to the industrial democracy concept within the British Steel Corporation. The idea of the industrial democracy that Sir Monty Finniston applied within the British Steel Corporation is not the type of industrial democracy that we shall get within British Aerospace and British Shipbuilding. That is why I support the Government tonight, and why I am glad now that I withdrew my amendments in Committee.
We have heard much about a deal that was made by the Lord President and Scottish National Members, but those of us from Scotland know that there was no deal. We know that we put the fear of death into Members of the Scottish National Party. We know that the meeting that took place on the Monday in the famous hotel in Edinburgh with members of the trade union movement, including shop stewards and the STUC, put the fear of death into the Scottish National Members.

Mr. Gordon Wilson: Does the hon. Gentleman realise that at the meeting of shop stewards in an hotel at Edinburgh that he has described, there was much more interest in gaining our support to save their jobs in a political sense than in our votes on the nationalisation measures?

Mr. Lambie: The hon. Gentleman knows that he is only trying to cover up a major retreat. The shop stewards and the members of the STUC were not asking for an emergency meeting on the morning of the vote except for the purpose of getting Scottish National Members to support the Government or to abstain. Luckily for the Government and the shipbuilding and aircraft workers in Scotland, the Scottish National Members did abstain.

Mr. Teddy Taylor: Tell us about Hunterston.

Mr. Lambie: The hon. Gentleman spoke enough about the drinking laws last night. Perhaps he is still feeling the after-effects. I remind him that we are now discussing serious matters. After all that he had to say last night, let him keep quiet now.
I was pointing out that the decision of the Scottish National Party was a narrow one. If reports are correct its Members took the decision to abstain by six votes to five. In spite of that decision, five Scottish National Members voted on the first Division. There were two Divisions, and on the first one the minority five voted along with the Tories, because, in effect, they are also Tories. They are Tories in disguise, here to sabotage the Socialist policies of a Labour Government. They will vote against the Government tomorrow night, because they know that we shall not be defeated. They hope to be able to say that they have achieved industrial democracy and a decentralisation of power for workers in the shipbuilding and aircraft industries in Scotland
9.15 p.m.
We should remind Scottish workers that if the crucial vote in the SNP had gone the other way, the Bill would have been lost and, we should have had a General Election, with the Tories returned to power to carry out policies that would

have hammered the working class in Scotland and England.
Throughout our debates in Committee I spoke up for the firm of Scottish Aviation, in my constituency.

Mr. George Younger: The firm is in my constituency.

Mr. Lambie: The hon. Member for Ayr (Mr. Younger) is correct. The firm is in his constituency, but most of the workers are in my constituency. During the last two or three months the hon. Member's presence has been sadly lacking in the negotiations with the workers and management of Scottish Aviation. I hope that tomorrow night, the hon. Member for Ayr—who is one of the decent Tories, certainly compared to the Tories in the SNP—will vote in the interests not of the Tory Party but of the workers in Scottish Aviation.
The Secretary of State spelled out the future of Scottish Aviation last month when he said:
Lord Beswick, the Chairman of the Organising Committee, has had considerable discussion with the work force at all levels in Scottish Aviation. They expressed the strong view that they would like to maintain the separate identity of Scottish Aviation. Lord Beswick informs me that it is the Organising Committee's intention to maintain the separate identity of Scottish Aviation, with a high degree of local autonomy as a separate profit centre within British Aerospace."—[Official Report, 29th June 1976; Vol. 914, c. 237.]
That statement was in reply to one of my amendments suggesting that Scottish Aviation should be given a separate identity within British Aerospace.
I was challenged and attacked in Committee by the hon. Member for Dundee, East (Mr. Wilson) for selling Scottish workers down the river. The SNP had tabled an amendment to set up a Scottish Aerospace Board, independent of British Aerospace. We know that Scottish Aviation represents under 5 per cent. of the British aerospace industry. It would have been nonsense to set up a Scottish Aerospace Board representing 5 per cent. of the aerospace industry and to put the other 95 per cent. of it under a board covering England and Wales. The Secretary of State recognised that. We now have the solution that I have been wanting. I put clearly on record that it is the solution that has been demanded by the work force and the management in Scottish Aviation.
The idea of SNP Members, of setting up a separate Scottish Aerospace Board, has been rejected by the Government. I am glad about that. Although SNP Members will try to make that out to be a victory, because they now accept it, the House will notice that they have no amendments dealing with Scottish Aviation. We have convinced them of the justice of the case that I have put forward and the case that is now accepted by my right hon. Friend the Secretary of State for Scotland.
Speaking on behalf of the aircraft workers in Scotland, I am happy with the present situation. I am happy with the Government's policy on industrial democracy and on the devolution of power. I am glad that the present Labour Government will win the vote tomorrow night. I hope that SNP Members vote against us, because we shall then see them along with their friends in the Tory Party—the party that they should never have left.

Mr. Gordon Wilson: There speaks a frightened man. It is not for nothing that he is known as "Lost deposit Lambie" in Central Ayrshire. After a speech of such considerable buffoonery as he has just produced, it is not surprising that other hon. Members will realise that that is so. When it comes to him putting his Socialist principles to the test on Monday, will he be voting for or against the Government's cuts in public expenditure? Just as he has backtracked on decentralisation and independence, we shall see how he votes then.

Mr. Lambie: It is a simple question that is easily answered. Since becoming a Member of Parliament in 1970, I have always voted against Governments, Tory or Labour, on the issue of public expenditure cuts. I have been consistent—as I am sometimes told by the Whips.

Mr. Wilson: We shall see what the hon. Gentleman does on Monday in relation to that. If it is a question of the Government's life and his continued existence in this Parliament being at stake, I am sure where his vote will go.
I should like to deal with the amendment on industrial democracy. Unlike some hon. Members, I accept that industrial democracy is essential for the improvement of labour relations. I

accept that workers in an industry have a right to take part in decision making. I do not think it necessary to go very much further than that at this stage because, as hon. Members will know, I argued on these matters very strongly in Committee.
However, what do Labour Members find has been altered when they look at the Government's amendment? Instead of getting a vague promise of industrial democracy, we are now to be given a vague promise of an industrial democracy in a strong and organic form. That is an amendment that I once described as a manure amendment. As it has been growing from the bottom, I have not changed my view.
Our amendment, which I hope will be voted upon later tonight if the Government find it impossible to accept it, tries to give some advice to British Shipbuilders and British Aerospace when they decide these questions. The amendment is not intended to lay down fixed and arbitrary rules which they must follow, but it defines industrial democracy in terms with which I hope all hon. Members would agree—that is, that adequate powers of decision making are shared by the corporations and their subsidiaries and representatives of the relevant work forces.
That definition is one to which the Government themselves might find it difficut to object. It does not lay down a fixed and stratified form of industrial democracy which must be adopted by the shipbuilding corporation or the aerospace corporation. It allows for growth and flexibility by laying down the principle that industrial democracy must include decision sharing democracy must include must have the right to take part in decision making. It is within that context that industrial democracy must develop.

Mr. Eddie Loyden: Would the hon. Gentleman like to develop his argument and say in which areas the decision making will take place, because so often when people refer to "industrial democracy" they mean the right of workers to choose whether they will use a red-handled screwdriver or a black-handled screwdriver? Is he saying that industrial democracy should be extended to cover such questions as the policy and direction of a company as well as the question of markets and the


extent of the distribution and profits of the company?

Mr. Wilson: I went into this question in great detail in Committee and I put down an amendment which sought to define the different areas of responsibility for the workers in the corporations or the boards structure who might be involved. I also introduced amendments relating to profit sharing. The criticism from the Government was that they were too rigid and that they wanted to build up industrial domocracy in organic form, that is, growing from something within each individual subsidiary and each corporation.
I had a meeting to discuss this with the Minister of State and the then Under-Secretary of State. They put to me forcibly that they must allow for flexibility. I accepted that argument. What I am therefore trying to do is, first, to strengthen the Government amendment in relation to industrial democracy by extending it to decision making. Secondly, I share an amendment with the right hon. Member for Sunderland, North (Mr. Willey) which seeks to bring in a time limit in order that there can be a report back from the corporations in relation to these matters. I hope that the Government will take into account the views of the right hon. Member for Sunderland, North and myself and my hon. Friends. If the Government cannot accept this very reasonable amendment I hope that at least it can be put to the test in a vote later.

Mr. Esmond Bulmer: Has the hon. Gentleman spoken to any of the representatives of the work force concerned and can he say whether they wish to be involved in the initial policy making when so many of the decisions will be very painful?

Mr. Wilson: The hon. Gentleman says that the decisions will be painful. Certainly we in the Scottish National Party have given our support to the work forces. We want to make these decisions less painful and to keep the Scottish shipbuilding yards and Scottish aviation in full production.
I have discussed these matters with members of the work force of my own shipyard, I went down and canvassed them at a workers' meeting in relation to the various proposals that I had in

mind and I discussed these matters with them. The trade unions want to ensure that their own position is not sabotaged in relation to industrial democracy. Members of the work force share that interest too.
The second question relates to decentralisation and Scottish control and to the debates which took place a month ago in respect of referrel to the Select Committee. On record in HANSARD is a pledge by the Lord President that the Government would look at amendments which are tabled by Members of the Scottish National Party, as well as their own amendments, in relation to decentralisation. The right hon. Gentleman specifically referred to
a recognised Scottish entity within the industry,"—[Official Report, 29th June 1976; Vol. 914, c. 325.]
9.30 p.m.
Our reaction to the amendments which have been tabled by the Government has been one of disappointment. The amendments represent a reasonable answer to decentralisation. The SNP had lodged amendments to deal with decentralisation but the Government, rather like Don Quixote, were tilting at windmills, and they tilted at the wrong windmill. They arrived at decentralisation, but all they could do in the context of a Scottish entity in shipbuilding terms was to use this vague phrase which occurs in the amendment—
with special reference to Scotland and Wales".
It is hardly surprising that the right hon. Member for Sunderland, North tabled an amendment to cut out the reference to Scotland and Wales, although he was very say this evening in dealing with it.

Mr. Adley: What on earth convinced the hon. Gentleman that the Lord President of the Council would do what he said he would do?

Mr. Wilson: We were prepared to enter into negotiations with the Government on an honourable basis in relation to jobs. I know that many hon. Members would rather take their standpoint from party ideology than discuss jobs, but the question of jobs in Scotland is paramount to the SNP.
It was said that our vote saved the Government, but it did not. Had we


voted with the members of Plaid Cymru a month ago, there would have been a tied vote, and in accordance with the traditions of the House, the Government would have won because a member of the Conservative Party was absent, as happened on the first vote in May. Whenever there is a crucial vote a member of the Conservative Party is absent, to avoid any question of the Government's being defeated and the calling of an early General Election for which the Conservative Party is not ready.
The amendments before us today have been presented as much because of the representations which I and my hon. Friends have made as for any other reason. I join the hon. Member for Bridgwater (Mr. King) in his analysis of the amendments. They are to be welcomed in so far as they tend to decentralise certain important areas of action to given units. The important areas are substantial, as they have to be, because the natural process with all organisations is for power to flow towards the centre, particularly when the purse strings are held at the centre. If there is one special weakness in the decentralisation content of the amendments, it is that the approval of the investment plans is in the hands of British Shipbuilders. In terms of the amendments, overall control is still to be left with British Shipbuilders.
The only way out of the mess is for the Government to set up a Scottish shipbuilding corporation, no doubt coordinating and liaising with British Shipbuilders, whereby the decentralisation procedures go to the individual yards. If an intermediate body is interposed, British Shipbuilders at the top has control of the purse strings and there is no control at the yards.
The Government are in an illogical mess. I have told the Government that this vague promise to Scotland and Wales will not do. The only hope for the Scottish shipyards is Scottish control—or at any rate decentralisation—and, above all, funds from Scottish oil resources to keep jobs going during the critical period ahead of the industry.

Mr. Ron Thomas: Amongst the batch of amendments are five which have been tabled by some of my hon.

Friends and myself. They are Amendment No. 305, Amendment (c) to Government Amendment No. 15, and Amendments Nos. 211, 212 and 329. Before speaking to those amendments I should welcome your advice, Mr. Speaker. We want to vote on Amendment No. 329 and I hope that by mentioning that now I have made the position clear and that we shall have that opportunity.

Mr. Speaker: I have to advise the hon. Member that after 11 o'clock I shall put only Government Amendments. Much depends on the order of amendments and the way in which the debate goes.

Mr. Thomas: I welcome the Government's amendment on industrial democracy and the consequential amendments which follow from it and which place a duty on the corporations to develop a strong and organic growth of industrial democracy. I welcome that because it is precisely along the lines of the amendment that we moved in Committee.
I have been involved with workers in Bristol aircraft factories and I have discussed industrial democracy with them. The lack of understanding of hon. Members opposite flows more than anything else from their remoteness from the workers and trade unions in the industries. The trade unions and the TUC have produced documents, reports and ideas of what industrial democracy is all about.
It is impossible for the Government or any outside agency to try to impose any kind of blueprint for industrial democracy. But it is right for the Government to create the environment in which it can develop. I can assure the Minister that the trade unions will not be reticent in coming forward with proposals for the type of industrial democracy that they want to see. But I am worried whether we can push managements to accept the ideas that will emerge from the trade union side.
If I were asked quickly to define industrial democracy I would say that it is a real sense of involvement by work people in the decisions which affect their working lives. That is not a difficult task. If the hon. Member for Dundee, East (Mr. Wilson) talked to shop


stewards in the industry he would find that industrial democracy does not operate at present.
The hon. Member for Christchurch and Lymington (Mr. Adley) is living in cloud-cuckoo-land. He has only to read the well-known court inquiries into the Ford dispute, when management turned to the trade union members who complained of lack of consultation and said that they did not understand the complaint because they always told workers what they were going to do. That is the extent of industrial democracy in industry today. Hon. Members opposite jealously guard such decisions as their prerogative. They say that workers should have nothing to do with management decisions on matters such as capital investment and pricing policy. They say that such decisions are the prerogative of the management.
We want to change that situation. At present management is prepared to invite shop stewards to talk about the canteen tea or the state of the toilets, but very little more.
I ask the Government seriously to consider accepting Amendment (c) to Government Amendment No. 15 That deals with forward planning, manpower, marketing, research and development, exports and imports and all the rest of it. We must have in mind the massive increase in the number of finished and semi-finished manufactured goods. Industry, especially the aerospace industry, must have the right to diversify and to take advantage of technological spin-off. That is a crucial consideration.
I turn to Amendment No. 329, which seeks to ensure that a "relevant trade union" should be a trade union affiliated to the Confederation of Shipbuilding and Engineering Unions. Whenever the Government—Tory or Labour—want any dirty work carried out, whenever they want to police workers and to bring in a prices and incomes policy, they call on the TUC and the recognised trade unions. They do not call on the sweetheart organisations represented by the Tories. Whenever they want to sort out the imbalances in the capitalist system, they call not on those sweetheart organisations but on the trade unions. Again, whenever they want people to serve on hospital boards and organisations of that kind, they go to the trades councils that

consist of trade unions affiliated to the TUC rather than to the sweetheart organisations.
In the aerospace industry there has been a pernicious growth of these sweetheart associations which try to pretend that they are trade unions in some form or other but which have the full backing of employers. I must tell the Minister that if any of those sweetheart organisations are recognised in these industries, we shall be in for a period of industrial conflict that we shall all regret.
The only way to deal with the situation is to provide that a "relevant trade union" shall be a body that is affiliated to the confederation. The procedures governing collective bargaining, disputes and many other areas of trade union activity have been built up between the shipbuilding and aerospace industries and the Confederation of Shipbuilding and Engineering Unions.

Mr. Stan Thorne: Is my hon. Friend aware that in my area the representatives of 12,000 to 15,000 aircraft workers have already signified to me in writing that if there is any attempt on the part of the new Aerospace Board to call them together to meet the sweetheart associations, they will flatly refuse to do so? They recognise the Confederation of Shipbuilding and Engineering Unions as the appropriate body to conduct negotiations with the Aerospace Board.

9.45 p.m.

Mr. Thomas: I thank my hon. Friend for that intervention. There is certainly the same kind of feeling in the Bristol aircraft factories.
The Conservative Front Bench spokesman could talk only about first-class and second-class citizens. But when the Government want dirty work done, when they want to control workers, they turn to the trade unions—the so-called first-class and second-class citizens.
Time and time again Conservative Members have insisted in debates in this Chamber that there are far too many trade unions, but when it suits them they support the sweet head associations, under the domination of the employers, whose main function is to undermine real and collective bargaining, which we all on both sides of the House ought to be supporting.

Mr. Edward Gardner: The hon. Member for Central Ayrshire (Mr. Lambie) was bold enough to try to define industrial democracy. He said that it must come from the workers. That seems to me to mean that if the workers, by a majority, want something, they must have it. But it must also mean that if, by a majority, they do not want it, it should be avoided.
I think it would be agreed by most people outside the House and by most right hon. and hon. Members in the House, that the majority of people in this country have never voted for and never would vote for more nationalisation. In talking of industrial democracy, when we narrow it down, to what most British workers want, I feel that The Times of 13th January 1975 summed it up when it pointed out that most British workers are against nationalisation. It was referring to the result of an Opinion Research Centre survey of attitudes in industry, which indicated that 67 per cent. of workers in British industry were against any attempt to nationalise the industries for which they worked.
In my constituency I have two divisions of the British Aircraft Corporation. I cannot accept, and I have not accepted, that these workers are so blind to their own interests and to the interests of the country that they are welcoming nationalisation in the way described by the hon. Member for Preston, South (Mr. Thorne).
Last Saturday morning I had the privilege of meeting representatives of the trade unions, including shop stewards, from the British Aircraft Corporation. One of them was a supporter of the hon. Member for Preston, South—a strong Labour supporter who believed in nationalisation—

Mr. Hoyle: What was his name?

Mr. Gardner: He said that the majority of the people who work for the British Aircraft Corporation do not want nationalisation of their industry.

Mr. Thorne: Mr. Thorne rose—

Mr. Gardner: I shall not give way. I want to go on and tell the House that the treasurer of a local branch of ASTMS has authorised me to give his name. He

is Mr. Andrew Ridley, the treasurer of No. 834 Branch of ASTMS. He told me that his members were so outraged by what the Government are doing in nationalising the aircraft industry that they were now talking about strike action.
I am reporting this matter accurately. I received the impression that nationalisation was regarded by those people as an indication of failure—a stigma that they resented. They felt that the Bill showed that the Government's better acquaintance with the realities of economics had done nothing to correct their prejudices, although it appeared to have enlarged their knowledge.
The Bill, which is supported by prejudiced people, has nothing to do with industrial democracy. The majority of the workers of the British Aircraft Corporation see only the dark prospect of unemployment coming from the provisions of the Bill. Until now the British Aircraft Corporation has been one of the most successful and prosperous aircraft industries in the world, envied by Europe and admired by America.
If the Bill is supposed to be a model of industrial democracy, I assure the House that the majority of the workers at BAC want nothing to do with it.

Mr. Richard Wainwright: I should like to commend the amendment in the name of the hon. Member for Dundee, East (Mr. Wilson), on which we shall shortly be voting, and which he moved in a robust manner. He gave no ground before the churlish attacks by Government supporters occupying sedentary positions.
The Liberal amendment is in much the same spirit as the amendment of the Scottish National Party. It makes it clear that if there is to be any talk about industrial democracy it must be on the basis of one employee, one vote. We are not talking about "trade union-ocracy" or "confederationocracy". We are talking about democracy for the employee.
There was some debate in Standing Committee in January on an extraordinary form of words. I refer to the expression "strong and organic". This evening an answer was given to a question that has troubled me for years. I often wondered why thoughtful Socialist


long ago developed a contempt for the Tribune Group. In centres such as the Tyneside Socialist Centre the Tribune Group has for long been a dirty expression. The Government have chosen to insert this extraordinary form of words into this appeasement legislation but which the Bill says cannot be enforced in the courts. Therefore, this is not legislation. It is just a pious declaration. The form of words
industrial democracy in a strong and organic form
sidesteps all the crucial issues of industrial power in the world today. It is a contemptible con trick to try to suggest to a few innocent people that the Left wing of the Labour Party in this House is putting up a tremendous stand on matters of great principle. The words "strong and organic" which the Government have so cravenly adopted—but which they have castrated by including in the Bill a statement that they cannot be enforced in the courts—are typical of the preacher who marks his sermon "Argument weak here; shout like hell". I apologise if that reference should give offence to you, Mr. Speaker. I am sure that those words are never found on your sermon notes.
The Left wing does not know what it means when it talks about industrial democracy. It argues, under a fine form of words, in favour of trade union monopoly rule. It qualifies that argument with this extraordinary, meaningless expression, "strong and organic". The Government have abdicated their responsibilities. They say, We do not know what the phrase means. Heaven forbid that we should tell the two corporations what to do. They must allow it to grow." That is the ultimate abdication. I repeat that to suggest that we should put in a statute that, having passed these words, if we do, we should declare that they shall certainly not be capable of enforcement by the courts, is an essay in the ludicrous.

Mr. Tebbit: The hon. Gentleman will no doubt realise that it also means that nobody could go to the court and get it to decide what "industrial democracy" means as the Government clearly and confessedly do not know what it means.

Mr. Wainwright: Of course. This concept, to have any meaning, must be based on the principle that it is about one-

employee one-vote, regardless whether he or she belongs to an organisation or what that organisation is. On that basis, it seems that the court will be able to enforce a provision that each centre of these two corporations should have its own powerful workplace council democratically elected by the workers. At the top, for controlling purposes, assuming that there might be 12 members on the board of each corporation, five of the 12 should be elected by the workers, again on the basis of one-employee one-vote.

Mr. Ron Thomas: Why not seven?

Mr. Wainwright: Because the taxpayers' money, although out of appallingly small incomes, will have purchased the assets which are being administered. It would be a betrayal to say to a majority of the workers "Here are hundreds of millions of pounds. You now have majority control over what you do with that money." That would be a betrayal if, as Labour Members perversely want, we were to hand over control not to the workers but to the representatives of certain powerful trade unions. That is a form of appeasement of industrial power which I am sure Parliament would never tolerate.

Mr. Hoyle: The hon. Gentleman talks about powerful trade unions. I should like to know where the Liberal Party stands in relation to the bogus staff associations which have grown up in the shipbuilding and aircraft industries.

Mr. Wainwright: Our view is that they are bogus, but it is up to the workers to decide whether they want to remain in them. I think that they are foolish to remain in them. However, this must be a matter for the workers themselves. If the Members of the Tribune Group could command some respect among the work force, they might be able to convince workers that these sweetheart associations are no good. But as long as they go on seeking to put pious words into statutes which are then declared to be unenforceable by the courts, they will be the laughing stock of their Socialist friends.
The amendment in the name of the Scottish National Party seems eminently sensible. It embodies the true spirit of democracy—one-person one-vote. My


right hon. and hon. Friends and I will fully support that amendment tonight.

10.0 p.m.

Mr. Varley: I Know that the House is anxious to come to a decision on the amendments. Therefore, it may be convenient for me now, with the leave of the House, to comment on the debate.
The Government amendments fulfil commitments made in Committee relating to industrial democracy and decentralisation. I am pleased that my hon. Friends have said that the amendments have gone a long way to fulfilling our commitments.
I am disappointed at the attitude of the official Opposition to these amendments. The hon. Member for Bridgwater (Mr. King) made some disparaging remarks about industrial democracy.

Mr. Tom King: No.

Mr. Varley: The hon. Gentleman pretended not to know what it meant. Those who have had some industrial experience know precisely what it means. The hon. Gentleman says that we should tell him. It really means that we have to identify those who work in industry with the decision-taking in their industries. If we are to make any progress on the basis of getting to the boundary of the possibility of improving our performance in international industrial competitiveness and on the basis of getting workers involved in decision-making at the plant, that is what industrial democracy means; not a set and rigid formula that can be laid down by statute, but giving opportunities for those who work in industry to participate in decision-taking. I am sure the hon. Gentleman understands that.
An interesting proposition came from the hon. Member for Bridgwater. He said that the Conservative Party is very much in favour of the decentralisation of State corporations.

Mr. Tom King: No.

Mr. Varley: He may be hedging a bit now but I well remember the legislation setting up the Gas Corporation, because I was leading for the Opposition when the then Conservative Government got rid of the Gas Council and the area and statutory boards. That made sense in the context of the new gas industry, but the Conservative Government abolished the

Scottish statutory board and the Welsh statutory board. Now they have changed their policy on that, and I am very disappointed that they take that view.
The Scottish National Party has again said that we have not met commitments we have given. I have in my hand a copy of the Glasgow Herald of Saturday last, which refers to all kinds of comments on the matter. The Secretary of the Clyde Confederation of Shipbuilding and Engineering Unions is reported as saying, in relation to our amendment:
This is what we have been arguing for. We want a regional identity to cover control over our own manufacturing planning. The amendment seems to give us that without the establishment of a completely separate shipbuilding industry called for by the SNP".
So the Scottish trade unions understand our amendment and welcome it. It is most significant to realise that this is the first decentralisation amendment that any Government have ever inserted into a nationalised industry Bill going through this House.
The only other matter to which I need refer concerns the amendment moved by my hon. Friend the Member for Bristol, North-West (Mr. Thomas)—Amendment No. 329. I know that it does not come up for vote tonight because is is really related to Clause 54 of the Bill; but in my view my hon. Friend made a very good case in referring to what he called "bogus" staff associations that were coming into being within the aircraft industry. He got some support from the hon. Member for Colne Valley (Mr. Wainwright) who recognised that these associations were bogus.
We have to consider this very carefully. We thought that we had covered the situation adequately within the Employment Protection Bill. We need to consider it further to see whether difficulties have arisen. My right hon. Friend the Secretary of State for Employment is here, and has heard what my hon. Friend had to say. I shall be consulting him tomorrow morning to see whether any help can be given in relation to Amendment No. 329 to overcome the difficulties that have been so well described.

Mr. Tom King: Is it the Secretary of State's view that any association that is not affiliated to the TUC is bogus? What is his attitude to the Shipbuilding and


Allied Industries Management Accosiation, which I understand has a membership of 60 per cent. of the managers within the shipbuilding industry?

Mr. Varley: I am not saying that all staff associations are bogus, but over the past few days I have heard horrifying stories of the way in which organisations have been established, within the aircraft industry in particular, which would undermine genuine trade union organisations, Again, I believe that the Conservative Party is being schizenophrenic. It knows that when it was in government it would have no truck with such organisations. When the Conservative Government of the day had to consult with the trade union movemen they did not go to bogus organisations or staff associations. They organised their representation from the TUC and affiliated organisations, and they were right to do so. When the right hon. Member for Sidcup (Mr. Heath) had his long and detailed discussions about union affairs, he did so through the TUC. That was perfectly proper.
My right hon. Friend and I want to establish, over the next few hours, exactly how serious the situation is. If it is serious and if it will undermine what I think is an understandable arrangement among all parties, we need to do something about it.
I hope that Scottish National Party Members will not press their amendment, because we have gone a great deal of the way to meet the anxieties that they expressed when we last debated this matter, I think in May. The amendment

incorporates in statute a principle of decentralisation which has never been tried before.

Mr. Gordon Wilson: I do not know whether the Secretary of State was listening to what I said, but I said that the Division would be in relation to Amendment (a) to Amendment No. 5. I said that although the main amendment on decentralisation is totally inadequate, some of the concepts within it are welcome, certainly in a Scottish context. But the Division will take place in relation to industrial democracy and the strengthening of the reporting back provisions. It is on that question that we should like an answer.

Mr. Varley: Everyone on the Opposition side seems to be trying to court the SNP. We have gone a long way to meet the genuine anxiety expressed about this matter and I think that we have done so. As for reporting back the progress of industrial democracy, we have laid a duty on British Shipbuilders to report every 12 months on progress and within six months after vesting. I hope that SNP Members will not persist with their amendment.

Amendment proposed to the proposed amendment, (a), after 'democracy', insert:
'in which adequate powers of decision-making are shared by the Corporations and their subsidiaries with members of the relevant work-forces '.—[Mr. Gordon Wilson.]

Question put, That the amendment to the proposed amendment be made:—

The House divided: Ayes 26. Noes 302.

Division No. 295.]
AYES
[10.08 p.m.


Beith, A. J.
Kilfedder, James
Thomas, Dafydd (Merioneth)


Crawford, Douglas
MacCormick, Iain
Thompson, George


Evans, Gwynfor (Carmarthen)
Mawby, Ray
Watt, Hamish


Eiving, Mrs Winifred (Moray)
Mudd, David
Welsh, Andrew


Freud, Clement
Pardoe, John
Wigley, Dafydd


Grimond, Rt Hon J.
Penhaligon, David
Wilson, Gordon (Dundee E)


Hawkins, Paul
Ross, Stephen (Isle of Wight)



Hooson, Emlyn
Smith, Cyril (Rochdale)
TELLERS FOR THE AYES:


Howells, Geraint (Cardigan)
Steel, David (Roxburgh)
Mrs. Margaret Bain and


Johnston, Russell (Inverness)
Stewart, Donald (Western Isles)
Mr. Richard Wainwright.




NOES


Abse, Leo
Barnett, Guy (Greenwich)
Boothroyd, Miss Betty


Allaun, Frank
Bates, Alf
Bottomley, Rt Hon Arthur


Anderson, Donald
Bean, R. E.
Boyden, James (Bish Auck)


Archer, Peter
Benn, Rt Hon Anthony Wedgwood
Bradley, Tom


Armstrong, Ernest
Bennett, Andrew (Stockport N)
Bray, Dr Jeremy


Ashley, Jack
Bidwell, Sydney
Brown, Hugh D. (Provan)


Ashton, Joe
Bishop, E. S.
Brown, Robert C. (Newcastle W)


Atkins, Ronald (Preston N)
Blenkinsop, Arthur
Brown, Ronald (Hackney S)


Atkinson, Norman
Boardman, H.
Buchan, Norman


Bagier, Gordon A. T.
Booth, Rt Hon Albert
Buchanan, Richard




Butler, Mrs Joyce (Wood Green)
Hattersley, Rt Hon Roy
Ogden, Eric


Callaghan, Rt Hon J. (Cardiff SE)
Hatton, Frank
O'Halloran, Michael


Callaghan, Jim (Middleton &amp; P)
Hayman, Mrs Helena
Orbach, Maurice


Campbell, Ian
Heifer, Eric S.
Orme, Rt Hon Stanley


Canavan, Dennis
Hooley, Frank
Ovenden, John


Cant, R. B.
Horam, John
Owen, Dr David


Carmichael, Neil
Howell, Rt Hon Denis (B'ham, Sm H)
Padley, Walter


Carter-Jones, Lewis
Hoyle, Doug (Nelson)
Palmer, Arthur


Cartwright, John
Huckfield, Les
Park, George


Castle, Rt Hon Barbara
Hughes, Rt Hon C. (Anglesey)
Parker, John


Clemitson, Ivor
Hughes, Mark (Durham)
Parry, Robert


Cocks, Michael (Bristol S)
Hughes, Robert (Aberdeen N)
Pavitt, Laurie


Cohen, Stanley
Hughes, Roy (Newport)
Peart, Rt Hon Fred


Coleman, Donald
Hunter, Adam
Pendry, Tom


Colquhoun, Ms Maureen
Irvine, Rt Hon Sir A. (Edge Hill)
Perry, Ernest


Concannon, J. D.
Irving, Rt Hon S. (Dartford)
Phipps, Dr Colin


Conlan, Bernard
Jackson, Colin (Brighouse)
Prentice, Rt Hon Reg


Cook, Robin F. (Edin C)
Jackson, Miss Margaret (Lincoln)
Prescott, John


Corbett, Robin
Janner, Greville
Price, C (Lewisham W)


Cox, Thomas (Tooting)
Jay, Rt Hon Douglas
Price, William (Rugby)


Craigen, J. M. (Maryhill)
Jenkins, Hugh (Putney)
Radice, Giles


Crawshaw, Richard
Jenkins, Rt Hon Roy (Stechford)
Rees, Rt Hon Merlyn (Leeds S)


Cronin, John
John, Brynmor
Reid, George


Crosland, Rt Hon Anthony
Johnson, James (Hull West)
Richardson, Miss Jo


Crowther, Stan (Rotherham)
Johnson, Walter (Derby S)
Roberts, Albert (Normanton)


Cryer, Bob
Jones, Barry (East Flint)
Roberts, Gwilym (Cannock)


Cunningham, G. (Islington S)
Jones, Dan (Burnley)
Robinson, Geoffrey


Cunningham, Dr J. (Whiteh)
Judd, Frank
Roderick, Caerwyn


Dalyell, Tam
Kaufman, Gerald
Rodgers, George (Chorley)


Davidson, Arthur
Kelley, Richard
Rodgers, William (Stockton)


Davies, Bryan (Enfield N)
Kerr, Russell
Rooker, J. W.


Davis, Denzil (Llanelli)
Kilroy-Silk, Robert
Roper, John


Davies, Ifor (Gower)
Kinnock, Neil
Rose, Paul B.


Davis, Clinton (Hackney C)
Lambie, David
Ross, Rt Hon W. (Kilmarnock)


Deakins, Eric
Lamborn, Harry
Rowlands, Ted


Dean, Joseph (Leeds West)
Lamond, James
Sandelson, Neville


de Freitas, Rt Hon Sir Geoffrey
Latham, Arthur (Paddington)
Sedgemore, Brian


Dell, Rt Hon Edmund
Leadbitter, Ted
Selby, Harry


Dempsey, James
Lee, John
Shaw, Arnold (Ilford South)


Doig, Peter
Lestor, Miss Joan (Eton &amp; Slough)
Shore, Rt Hon Peter


Dormand, J. D.
Lever, Rt Hon Harold
Short, Rt Hon E. (Newcastle C)


Douglas-Mann, Bruce
Lewis, Ron (Carlisle)
Short, Mrs Renee (Wolv NE)


Duffy, A. E. P.
Lipton, Marcus
Silkin, Rt Hon John (Deptford)


Dunn, James A.
Litterick, Tom
Silkin, Rt Hon S. C. (Dulwich)


Dunnett, Jack
Lomas, Kenneth
Sillars, James


Dunwoody, Mrs Gwyneth
Loyden, Eddie
Silverman, Julius


Eadie, Alex
Luard, Evan
Skinner, Dennis


Edge, Geoff
Lyons, Edward (Bradford W)
Small, William


Edwards, Robert (Wolv SE)
Mabon, Dr J. Dickson
Smith, John (N Lanarkshire)


Ellis, John (Brigg &amp; Scun)
McCartney, Hugh
Snape, Peter


Ellis, Tom (Wrexham)
McDonald, Dr Oonagh
Spearing, Nigel


English, Michael
MacFarquhar, Roderick
Spriggs, Leslie


Ennals, David
McGuire, Michael (Ince)
Stallard, A. W.


Evans, Fred (Caerphilly)
MacKenzie, Gregor
Stewart, Rt Hon M. (Fulham)


Evans, Ioan (Aberdare)
Mackintosh, John P.
Stoddart, David


Evans, John (Newton)
Maclennan, Robert
Stott, Roger


Ewing, Harry (Stirling)
McMillan, Tom (Glasgow C)
Strang, Gavin


Faulds, Andrew
McNamara, Kevin
Strauss, Rt Hon G. R.


Fernyhough, Rt Hon E.
Madden, Max
Summerskill, Hon Dr Shirley


Fitch, Alan (Wigan)
Magee, Bryan
Swain, Thomas


Fitt, Gerard (Belfast W)
Marion. Simon
Taylor, Mrs Ann (Bolton W)


Flannery, Martin
Mallalleu, J. P. W.
Thomas, Jeffrey (Abertillery)


Fletcher, L. R. (Ilkeston)
Marks, Kenneth
Thomas, Mike (Newcastle E)


Fletcher, Ted (Darlington)
Marquand, David
Thomas, Ron (Bristol NW)


Foot, Rt Hon Michael
Marshall, Dr Edmund (Goole)
Thorne, Stan (Preston South)


Ford, Ben
Marshall, Jim (Leicester S)
Tierney, Sydney


Forrester, John
Mason, Rt Hon Roy
Tinn, James


Fowler, Gerald (The Wrekin)
Maynard, Miss Joan
Tomlinson, John


Fraser, John (Lambeth, N'w'd)
Meacher, Michael
Tomney, Frank


Freeson, Reginald
Mellish, Rt Hon Robert
Torney, Tom


Garrett, John (Norwich S)
Mendelson, John
Tuck, Raphael


Garrett, W. E. (Wallsend)
Mikardo, Ian
Urwin, T. W.


George, Bruce
Millan, Bruce
Varley, Rt Hon Eric G.


Gilbert, Dr John
Miller, Dr M. S. (E Kilbride)
Wainwright, Edwin (Dearne V)


Ginsburg, David
Miller, Mrs Millie (Ilford N)
Walden, Brian (B'ham, L'dyw'd)


Golding, John
Mitchell, R. C. (Solon, Itchen)
Walker, Harold (Doncaster)


Gould, Bryan
Moonman, Eric
Walker, Terry (Kingswood)


Gourlay, Harry
Morris, Alfred (Wylhenshawe)
Ward, Michael


Grant, George (Morpeth)
Morris, Charles R. (Openshaw)
Watkins, David


Grant, John (Islington C)
Morris, Rt Hon J. (Aberavon)
Watkinson, John


Grocott, Bruce
Moyle, Roland
Weetch, Ken


Hamilton, James (Bothwell)
Mulley, Rt Hon Frederick
Weitzman, David


Hamilton, W. W. (Central Fife)
Murray, Rt Hon Ronald King
Wellbeloved, James


Hardy, Peter
Newens, Stanley
White, Frank R. (Bury)


Harrison, Walter (Wakefield)
Noble, Mike
White, James (Pollok)


Hart. Rt Hon Judith
Oakes, Gordon
Whitehead, Phillip







Whitlock, William
Wilson, Alexander (Hamilton)
Wrigglesworth, Ian


Willey, Rt Hon Frederick
Wilson, Rt Hon Sir Harold (Huyton)
Young, David (Bolton E)


Williams, Alan (Swansea W)
Wilson, William (Coventry SE)



Williams, Alan Lee (Hornch'ch)
Wise, Mrs Audrey
TELLERS FOR THE NOES:


Williams, Rt Hon Shirley (Hertford)
Woodall, Alec
Mr. Ted Graham and


Williams, Sir Thomas
Woof, Robert
Mr. Joseph Harper.

Question accordingly negatived.

Proposed amendment agreed to.

Amendment proposed: No. 6, in page 4, line 39, at end insert:
'(7A) It shall be the duty of each Corporation to enter within 3 months of the relevant vesting date into consultation with the relevant trade unions as to the methods which it should adopt for the purpose of carrying out its duty under subsection (7) above'.—[Mr. Varley.]

Amendment proposed to the proposed amendment: (c) leave out 'the relevant trade unions' and insert 'its employees'.—[Mr. Toni King.]

Question put, That the amendment to the proposed amendment be made:—

The House divided: Ayes 294, Noes 303.

Division No. 296.]
AYES
[10.26 p.m.


Adley, Robert
Douglas-Hamilton, Lord James
Hooson, Emlyn


Aitken, Jonathan
Drayson, Burnaby
Hordern, Peter


Alison, Michael
du Cann, Rt Hon Edward
Howe, Rt Hon Sir Geoffrey


Amery, Rt Hon Julian
Dunlop, John
Howell, David (Guildford)


Arnold, Tom
Durant, Tony
Howell, Ralph (North Norflok)


Atkins, Rt Hon H. (Spelthorne)
Dykes, Hugh
Howells, Geraint (Cardigan)


Awdry, Daniel
Eden, Rt Hon Sir John
Hunt, David (Wirral)


Bain, Mrs Margaret
Edwards, Nicholas (Pembroke)
Hunt, John (Bromley)


Baker, Kenneth
Elliott, Sir William
Hurd, Douglas


Banks, Robert
Emery, Peter
Hutchison, Michael Clark


Beith, A. J.
Evans, Gwynfor (Carmarthen)
Irving, Charles (Cheltenham)


Bell, Ronald
Ewing, Mrs Winifred (Moray)
James, David


Bennett, Sir Frederic (Torbay)
Eyre, Reginald
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)


Bennett, Dr Reginald (Fareham)
Fairgrieve, Russell
Jessel, Toby


Benyon, W.
Farr, John
Johnson Smith, G. (E Grinstead)


Berry, Hon Anthony
Fell, Anthony
Johnston, Russell (Inverness)


Bitten, John
Finsberg, Geoffrey
Jones, Arthur (Daventry)


Biggs-Davison, John
Fletcher, Alex (Edinburgh N)
Jopling, Michael


Blaker, Peter
Fletcher-Cooke, Charles
Joseph, Rt Hon Sir Keith


Body, Richard
Forman, Nigel
Kaberry, Sir Donald


Boscawen, Hon Robert
Fowler, Norman (Sutton C'f'd)
Kellelt-Bowman, Mrs Elaine


Botlomley, Peter
Fox, Marcus
Kershaw, Anthony


Bowden, A. (Brighton, Kemptown)
Fraser, Rt Hon H. (Stafford a St)
Kilfedder, James


Boyson, Dr Rhodes (Brent)
Freud, Clement
Kimball, Marcus


Bradford, Rev Robert
Fry, Peter
King, Evelyn (South Dorset)


Braine, Sir Bernard
Galbrailh, Hon T. Q. D.
King, Tom (Bridgwater)


Brittan, Leon
Gardiner, George (Reigate)
Kirk, Sir Peter


Brocklebank-Fowler, C.
Gardner, Edward (S Fylde)
Kitson, Sir Timothy


Brotherton, Michael
Gilmour, Sir John (East Fife)
Knight, Mrs Jill


Brown, Sir Edward (Bath)
Glyn, Dr Alan
Knox, David


Rryan, Sir Paul
Godber, Rt Hon Joseph
Lamont, Norman


Buchanan-Smith, Alick
Goodhart, Philip
Lane, David


Buck, Antony
Goodhew, Victor
Langford-Holt, Sir John


Budgen, Nick
Goodlad, Alastair
Latham, Michael (Mellon)


Bulmer, Esmond
Gorst, John
Lawrence, Ivan


Burden, F. A.
Gow, Ian (Eastbourne)
Lawson, Nigel


Butler, Adam (Bosworth)
Gower, Sir Raymond (Barry)
Le Marchant, Spencer


Carlisle, Mark
Grant, Anthony (Harrow C)
Lester, Jim (Beeston)


Chalker, Mrs Lynda
Gray, Hamish
Lewis, Kenneth (Rutland)


Channon, Paul
Griffiths, Eldon
Lloyd, Ian


Churchill, W. S.
Grimond, Rt Hon J.
Loveridge, John


Clark, Alan (Plymouth, Sutton)
Grist, Ian
Luce, Richard


Clark, William (Croydon S)
Grylls, Michael
MacCormick, Iain


Clarke, Kenneth (Rushcliffe)
Hall, Sir John
McCrindle, Robert


Clegg, Walter
Hall-Davis, A. G. F.
McCusker, H.


Cockcroft, John
Hamilton, Michael (Salisbury)
Macfarlane, Neil


Cooke, Robert (Bristol W)
Hampson, Dr Keith
MacGregor, John


Cope, John
Hannam, John
Macmillan, Rt Hon M. (Farnham)


Cormack, Patrick
Harrison, Col Sir Harwood (Eye)
McNair-Wilson, M. (Newbury)


Corrie, John
Harvie Anderson, Rt Hon Miss
McNair-Wilson, P. (New Forest)


Costaln, A. P.
Hastings, Stephen
Madel, David


Craig, Rt Hon W. (Belfast E)
Havers, Sir Michael
Marshall, Michael (Arundel)


Crawford, Douglas
Hawkins, Paul
Marten, Neil


Critchley, Julian
Hayhoe, Barney
Mates, Michael


Crouch, David
Heath, Rt Hon Edward
Maude, Angus


Crowder, F. P.
Heseltine, Michael
Maudling, Rt Hon Reginald


Davies, Rt Hon J. (Knutsford)
Hicks, Robert
Mawby, Ray


Dean, Paul (N Somerset)
Higgins, Terence L.
Maxwell-Hyslop, Robin


Dodsworth, Geoffrey
Holland, Philip
Mayhew, Patrick




Meyer, Sir Anthony
Renton, Rt Hon Sir D. (Hunts)
Stokes, John


Miller, Hal (Bromsgrove)
Renton, Tim (Mid-Sussex)
Stradling Thomas, J.


Mills, Peter
Rhys Williams, Sir Brandon
Tapsell, Peter


Miscampbell, Norman
Ridley, Hon Nicholas
Taylor, R. (Croydon NW)


Mitchell, David (Basingstoke)
Ridsdale, Julian
Taylor, Teddy (Cathcart)


Moate, Roger
Rifkind, Malcolm
Tebbit, Norman


Molyneaux, James
Roberts, Wyn (Conway)
Temple-Morris, Peter


Monro, Hector
Rodgers, Sir John (Sevenoaks)
Thatcher, Rt Hon Margaret


Montgomery, Fergus
Ross, Stephen (Isle of Wight)
Thomas, Dafydd (Merioneth)


Moore, John (Croydon C)
Ross, William (Londonderry)
Thompson, George


More, Jasper (Ludlow)
Rossi, Hugh (Hornsey)
Townsend, Cyril D.


Morgan, Geraint
Rost, Peter (SE Derbyshire)
Trotter, Neville


Morgan-Giles, Rear-Admiral
Royle, Sir Anthony
Tugendhat, Christopher


Morris, Michael (Northampton S)
Sainsbury, Tim
van Straubenzee, W. R.


Morrison, Charles (Devizes)
St. John-Stevas, Norman
Vaughan, Dr Gerard


Morrison, Hon Peter (Chester)
Scott, Nicholas
Viggers, Peter


Mudd, David
Scott-Hopkins, James
Wainwright, Richard (Colne V)


Neave, Alrey
Shaw, Giles (Pudsey)
Wakenham, John


Nelson, Anthony
Shaw, Michael (Scarborough)
Walder, David (Clitheroe)


Neubert, Michael
Shelton, William (Streatham)
Walker, Rt Hon P. (Worcester)


Newton, Tony
Shepherd, Colin
Walker-Smith, Rt Hon Sir Derek


Normanton, Tom
Shersby, Michael
Wall, Patrick


Nott, John
Silvester, Fred
Walters, Dennis


Onslow, Cranley
Sims, Roger
Warren, Kenneth


Oppenheim, Mrs Sally
Sinclair, Sir George
Watt, Hamish


Osborn, John
Skeet, T. H. H.
Weatherill, Bernard


Page, John (Harrow West)
Smith, Cyril (Rochdale)
Wells, John


Page, Rt Hon R. Graham (Crosby)
Smith, Dudley (Warwick)
Welsh, Andrew


Pardoe, John
Speed, Keith
Whitelaw, Rt Hon William


Parkinson, Cecil
Spence, John
Wiggin, Jerry


Penhaligon, David
Spicer, Jim (W Dorset)
Wigley, Dafydd


Percival, Ian
Spicer, Michael (S Worcester)
Wilson, Gordon (Dundee E)


Pink, R. Bonner
Sproat, Iain
Winterton, Nicholas


Powell, Rt Hon J. Enoch
Stainton, Keith
Wood, Rt Hon Richard


Price, David (Eastlelgh)
Stanbrook, Ivor
Young, Sir G. (Ealing, Acton)


Prior, Rt Hon James
Stanley, John
Younger, Hon George


Pym, Rt Hon Francis
Steel, David (Roxburgh)



Raison, Timothy
Steen, Anthony (Wavertree)
TELLERS FOR THE AYES:


Rathbone, Tim
Stewart, Donald (Western Isles)
Mr. Carol Mather and


Rawlinson, Rt Hon Sir Peter
Stewart, Ian (Hitchin)
Mr. Michael Roberts.


Rees, Peler (Dover &amp; Deal)






NOES


Abse, Leo
Cocks, Michael (Bristol S)
Evans, Ioan (Aberdare)


Allaun, Frank
Cohen, Stanley
Evans, John (Newton)


Anderson, Donald
Coleman, Donald
Ewing, Harry (Stirling)


Archer, Peter
Colquhoun, Ms Maureen
Faulds, Andrew


Armstrong, Ernest
Concannon, J. D.
Fernyhough, Rt Hon E.


Ashley, Jack
Conlan, Bernard
Fitch. Alan (Wigan)


Ashton, Joe
Cook, Robin F. (Edin C)
Fitt, Gerard (Belfast W)


Atkins, Ronald (Preston N)
Corbett, Robin
Flannery, Martin


Atkinson, Norman
Cox, Thomas (Tooting)
Fletcher, L. R. (Ilkeston)


Bagier, Gordon A. T.
Craigen, J. M. (Maryhill)
Fletcher, Ted (Darlington)


Barnett, Guy (Greenwich)
Crawshaw, Richard
Foot, Rt Hon Michael


Barnett, Rt Hon Joel (Heywood)
Crostand, Rt Hon Anthony
Ford, Ben


Bates, All
Crowther, Stan (Rotherham)
Forrester, John


Bean, R. E.
Cryer, Bob
Fowler, Gerald (The Wrekin)


Benn, Rt Hon Anthony Wedgwood
Cunningham, G. (Islington S)
Fraser, John (Lambeth, N'w'd)


Bennett, Andrew (Stockport N)
Cunningham, Dr J. (Whiteh)
Freeson, Reginald


Bidwell, Sydney
Dalyell, Tam
Garrett, John (Norwich S)


Bishop, E. S.
Davidson, Arthur
Garrett, W. E. (Wallsend)


Blenkinsop, Arthur
Davies, Bryan (Enfield N)
George, Bruce


Boardman, H.
Davis, Denzil (Llanelli)
Gilbert, Dr John


Booth, Rt Hon Albert
Davies, Ifor (Gower)
Ginsburg, David


Boothroyd, Miss Betty
Davis, Clinton (Hackney C)
Golding, John


Bottomley, Rt Hon Arthur
Deakins, Eric
Gould, Bryan


Boyden, James (Bish Auck)
Dean, Joseph (Leeds West)
Gourlay, Harry


Bradley, Tom
de Freltas, Rt Hon Sir Geoffrey
Grant, George (Morpeth)


Bray, Dr Jeremy
Dell, Rt Hon Edmund
Grant, John (Islington C)


Brown, Hugh D. (provan)
Dempsey, James
Grocott, Bruce


Brown, Robert C. (Newcastle W)
Doig, Peter
Hamilton, James (Bothwell)


Brown, Ronald (Hackney S)
Dormand, J. D.
Hamilton, W. W. (Central Fife)


Buchan, Norman
Douglas-Mann, Bruce
Hardy, Peter


Buchanan, Richard
Duffy, A. E. P.
Harrison, Walter (Wakefield)


Butler, Mrs Joyce (Wood Green)
Dunn, James A.
Hart, Rt Hon Judith


Callaghan, Rt Hon J. (Cardiff SE)
Dunnett, Jack
Hattersley, Rt Hon Roy


Callaghan, Jim (Middleton &amp; P)
Dunwoody, Mrs Gwyneth
Hatton, Frank


Campbell, Ian
Eadie, Alex
Hayman, Mrs Helens


Canavan, Dennis
Edge, Geoff
Healey, Rt Hon Denis


Cant, R. B.
Edwards, Robert (Wolv SE)
Heffer, Eric S.


Carmichael, Neil
Ellis, John (Brigg &amp; Scun)
Hooley, Frank


Carter-Jones, Lewis
Ellis, Tom (Wrexham)
Horam, John


Cartwright, John
English, Michael
Howell, Rt Hon Denis (B'ham,Sm H)


Castle, Rt Hon Barbara
Ennals, David
Hoyle, Doug (Nelson)


Clemitson, Ivor
Evans, Fred (Caerphilly)
Huckfield, Les







Hushes, Rt Hon C. (Anglesey)
Hellish, Rt Hon Robert
Sillars, James


Hughes, Mark (Durham)
Mendelson, John
Silverman, Julius


Hughes, Robert (Aberdeen N)
Mikardo, Ian
Skinner, Dennis


Hughes, Roy (Newport)
Millan, Bruce
Small, William


Hunter, Adam
Miller, Dr M. S. (E Kilbride)
Smith, John (N Lanarkshire)


Irvine, Rt Hon Sir A. (Edge Hill)
Miller, Mrs Millie (Ilford N)
Snape, Peter


Irving, Rt Hon S. (Dartlord)
Mitchell, R. C. (Soton, Itchen)
Spearing, Nigel


Jackson, Colin (Brighouse)
Moonman, Eric
Spriggs, Leslie


Jackson, Miss Margaret (Lincoln)
Morris, Alfred (Wythenshawe)
Stallard, A. W.


Janner, Greville
Morris, Charles R. (Openshaw)
Stewart, Rt Hon M. (Fulham)


Jay, Rt Hon Douglas
Morris, Rt Hon J. (Aberavon)
Stoddart, David


Jenkins, Hugh (Putney)
Moyle, Roland
Stott, Roger


Jenkins, Rt Hon Roy (Stechford)
Mulley, Rt Hon Frederick
Strang, Gavin


John, Brynmor
Murray, Rt Hon Ronald King
Strauss, Rt Hon G. R.


Johnson, James (Hull West)
Newens, Stanley
Summerskill, Hon Dr Shirley


Johnson, Walter (Derby S)
Noble, Mike
Swain, Thomas


Jones, Barry (East Flint)
Oakes, Gordon
Taylor, Mrs Ann (Bolton W)


Jones, Dan (Burnley)
Ogden, Eric
Thomas, Jeffrey (Abertillery)


Judd, Frank
O'Halloran, Michael
Thomas, Mike (Newcastle E)


Kaufman, Gerald
Orbach, Maurice
Thomas, Ron (Bristol NW)


Kelley, Richard
Orme, Rt Hon Stanley
Thorne, Stan (Preston South)


Kerr, Russell
Ovenden, John
Tierney, Sydney


Kilroy-Silk, Robert
Owen, Dr David
Tinn, James


Kinnock, Neil
Padley, Walter
Tomlinson, John


Lambie, David
Palmer, Arthur
Tomney, Frank


Lamborn, Harry
Park, George
Torney, Tom


Lamond, James
Parker, John
Tuck, Raphael


Latham, Arthur (Paddington)
Parry, Robert
Urwin, T. W,


Leadbitter, Ted
Pavitt, Laurie
Varley, Rt Hon Eric G.


Lee, John
Peart, Rt Hon Fred
Wainwright, Edwin (Dearne V)


Lestor, Miss Joan (Eton &amp; Slough)
Pendry, Tom
Walden, Brian (B'ham, L'dyw'd)


Lever, Rt Hon Harold
Perry, Ernest
Walker, Harold (Doncaster)


Lewis, Arthur (Newham, N)
Phipps, Dr Colin
Walker, Terry (Kingswood)


Lewis, Ron (Carlisle)
Prentice, Rt Hon Reg
Ward, Michael


Lipton, Marcus
Prescott, John
Watkins, David


Litterick, Tom
Price, C (Lewisham W)
Watkinson, John


Lomas, Kenneth
Price, William (Rugby)
Weetch, Ken


Loyden, Eddie
Radice, Giles
Weizman, David


Luard, Evan
Rees, Rt Hon Merlyn (Leeds S)
Wellbeloved, James


Lyons, Edward (Bradford W)
Richardson, Miss Jo
White, Frank R. (Bury)


Mabon, Dr J. Dickson
Roberts, Albert (Normanton)
White, James (Pollok)


McCartney, Hugh
Roberts, Gwilym (Cannock)
Whitehead, Phillip


McDonald, Dr Oonagh
Robinson, Geoffrey
Whitlock, William


MacFarquhar, Roderick
Roderick, Caerwyn
Willey, Rt Hon Frederick


McGuire, Michael (Ince)
Rodgers, George (Chorley)
Williams, Alan (Swansea W)


MacKenzie, Gregor
Rodgers, William (Stockton)
Williams, Alan Lee (Hornch'ch)


Mackintosh, John P.
Rooker, J. W.
Williams, Rt Hon Shirley (Hertford)


Maclennan, Robert
Roper, John
Williams, Sir Thomas


McMillan, Tom (Glasgow C)
Rose, Paul B.
Wilson, Alexander (Hamilton)


McNamara, Kevin
Ross, Rt Hon W. (Kilmarnock)
Wilson, Rt Hon (Huyton)


Madden, Max
Rowlands, Ted
Wilson, William (Coventry SE)


Magee, Bryan
Sandelson, Neville
Wise, Mrs Audrey


Mahon, Simon
Sedgemore, Brian
Woodall, Alec


Mallalieu, J. P. W.
Selby, Harry
Woof, Robert


Marks, Kenneth
Shaw, Arnold (Ilford South)
Wrigglesworth, Ian


Marquand, David
Sheldon, Robert (Ashton-u-Lyne)
Young, David (Bolton E)


Marshall, Dr Edmund (Goole)
Shore, Rt Hon Peter



Marshall, Jim (Leicester S)
Short, Rt Hon E. (Newcastle C)
TELLERS FOR THE NOES:


Mason, Rt Hon Roy
Short, Mrs Renee (Wolv NE)
Mr, Ted Graham and


Maynard, Miss Joan
Silkin, Rt Hon John (Deptford)
Mr. Joseph Harper.


Meacher, Michael
Silkin, Rt Hon S. C. (Dulwich)

Question accordingly negatived.

Proposed amendment agreed to.

Amendments made: No. 7, in page 4, line 39, at end insert:
'(7B) Nothing in this section shall be construed as imposing upon either Corporation, directly or indirectly, any form of duty or liability enforceable by proceedings before any court'.

No. 8, in page 4, line 40, leave out subsection (8).—[Mr. Hack field.]

Clause 3

ACTIVITIES AND POWERS OF THE CORPORATIONS

Mr. Les Hucklield: I beg to move Amendment No. 9, in page 5, line 32, after '1948)', insert:
'and section 200 of the Companies Act (Northern Ireland) 1960'.

Mr. Speaker: With this we may discuss Government Amendments Nos. 10, 116, 118 to 121, 130, 179, 180, 185, 187 and 195.

Mr. Huckfield: This group of amendments, is concerned largely with technical matters with relevance to Scottish law and the law in Northern Ireland. Because of the technical nature of the matter, I ask the leave of the House to move the amendment formally.

Amendment agreed to.

Amendment made: No. 10, in page 5, line 36, leave out 'that section' and insert 'those sections'.—[Mr. Huck field.]

Mr. Les Huckfield: I beg to move Amendment No. 11, in page 6, line 18, leave out subsection (8).

Mr. Speaker: With this we may discuss Government Amendment No. 12.

Mr. Huckfield: We had a debate about this clause this afternoon, and after careful consideration we have accepted that the provision in Clause 3(6) and (8) to allow the Secretary of State to amend the corporation's powers by statutory instrument does not materially increase the element of flexibility, and we have therefore tabled these amendments to delete the two sections. The Secretary of State retains the power under Clause 2 to amend the duties of the corporation by Statutory Instrument. Under Clause 3(1)(b) the corporations, with the consent

of the Secretary of State, have the power to undertake new activities.
The provisions will introduce a substantial new element of flexibility into the operations of the corporations and into their relationship with the Secretary of State. This is not weakened by the amendments, and I urge hon. Members to accept them because they eliminate potential technical difficulties.

Amendment agreed to.

Amendment made: No. 12, in page 6, line 34, leave out subsection (10).—[Mr. Flack field.]

Clause 4

CORPORATIONS TO GIVE EFFECT TO DIRECTIONS OF SECRETARY OF STATE

Amendment made: No. 13, in page 7, line 9, leave out 'companies' and insert:
'bodies corporate, whether or not incorporated into the United Kingdom'.—[Mr. Huck field.]

Mr. Willey: I beg to move Amendment No. 250, in page 7, line 12, leave out subsection (3).
I gather than it will also be convenient to take with this amendment the following amendments:
Amendment No. 251, in page 7, line 25, leave out 'directions' and insert 'direction to either Corporation').
Amendment No. 252, in page 7, line 26, leave out 'shall consult the Corporation to which they are to be given' and insert:

(a) shall consider all factors relating to that Corporation that appear to him to be relevant to the proposed direction, and
(b) shall consult the Corporation'.
Government Amendment No. 14.
Amendment No. 253, in page 7, line 27, at end insert:
'(3B) Before giving any such direction to British Shipbuilders, the Secretary of State shall have full regard to the need—

(a) to co-ordinate the operation of British Shipbuilders with those of the British shiping industry;
(b) to take account of any shipbuilding policy for the time being adopted by any international organisation of which the United Kingdom is a member;
(c) to ensure that British Shipbuilders is able to compete in world markets on equal terms with its competitors in other countries; and


(d) to take account of any special considerations relating to parts of the United Kingdom and in particular, but without prejudice to the generality of those considerations, relating to employment'.
and Government Amendment No. 35.
These are important amendments laying down guidelines to the Secretary of State in giving directions to British Shipbuilders. This matter was fully discussed in Committee, and I am obliged to the Department for affording me the services of parliamentary draftsmen, who have improved the wording of the amendments.

Mr. Tom King: The important point about the amendments tabled by the right hon. Member for Sunderland, North (Mr. Willey) and discussed in Committee concerns subsection (3B)(a). It is important to make clear that there is a marked distinction between "co-ordination" and "coercion". It is also important to have a sensible understanding of the operations of British Shipbuilders in its relationships with the British shipbuilding industry.
We are concerned to ensure that this provision shall not be interpreted in a reverse way, so to speak, to compel the British shipbuilding industry to be coordinated with British Shipbuilders. In Committee the right hon. Member for Sunderland, North made clear that that was not his intention, but this is a sensitive area of activity. Although we should like to see the maximum use made of British shipbuilding yards, there are difficulties and disadvantages in bringing in compulsory powers.
The other question that arises on these amendments relates to the State taking power on account of special employment considerations. Those hon. Members who represent the Southampton area, which is not a development area and does not have the same unemployment problems, would be concerned if that consideration were regarded as an overriding one in placing orders for ships. Since the provisions of (3B) could be regarded as running counter to the proposals for decentralisation, the Government should make their position clear.

Mr. Les Huckfield: I am grateful to my right hon. Friend the Member for Sunderland, North (Mr. Willey) for his comments and, indeed, for his assistance in Committee on this point.
The basic purpose of Amendments Nos. 250 to 253 is to replace subsection (2A) which was inserted into the Bill in Committee at the instance of my right hon Friend.
Although the Government opposed my right hon. Friend's amendment at the time, we now accept the verdict of the Committee that the important considerations enumerated in my right hon. Friend's subsection should be mentioned in the Bill. There is no difference of view between us on the need to ensure that our shipbuilding industry meets the needs of our shipping industry, that full account is taken of international obligations, about the need to ensure that our shipbuilders compete on equal terms with foreign rivals, about which concern has been expressed by my hon. Friends, and about the importance of shipbuilding to the regions.
However, the form in which the Bill left Committee would restrict the circumstances in which a general direction could be given. In practice, a direction might be appropriate on a matter not covered by the criteria set out in the existing version of Clause 4. Therefore, in addition to accepting my right hon. Friend's Amendment No. 250, the Government also commend the other amendments in the group so that there will be flexibility to give directions on other grounds—for example, on matters relating to national security.

10.45 p.m.

Mr. Trotter: I wonder whether the Minister can say a little about the international organisations of which the United Kingdom is a member, because the amendment says that British Shipbuilders shall take account of the policy adopted by any international organisation of which Britain is a member. Can the Minister tell us which international organisations these are, and what their policies are? If there are any such effective organisations, they have not been putting forward policies that are adequate to deal with the enormous overcapacity of this industry. I should be grateful for any help that the Minister can give about what the Government are doing on this front, because unless the problem is dealt with internationally there will be no solution to it.

Mr. Les Huck field: The hon. Gentleman, with his usual assiduousness in these matters, has raised a relevant point. As he knows, we had several debates in Committee upstairs about the policies of other nations and, in particular, the policies that were pursued and were to be pursued in the European Community. If there is a reference to international obligations, it refers to any international obligations that may in the future accrue under the EEC and other bodies such as OECD. That was the purpose of inserting the reference in that form.

Mr. Tebbit: I should like to raise two points with the Minister. First, under Amendment No. 253, paragraph (a) says that in future it will be necessary to have full regard to the need
to co-ordinate the operations of British Shipbuilders with those of the British shipping industry.
Can the Minister tell us whether we should read any significance into the way in which that is put; that is, that it is British Shipbuilders which will have to have regard to the needs of the shipping industry?
Do we interpret from that that the Government have set their face against any form of persuasion, arm-twisting, direction or anything else on the shipping industry to persuade it to buy British ships which it does not think are necessarily most suited to a shipping line's business? If we read the amendment carefully we see that it is British Shipbuilders which have to do the adjustment and the co-ordinating. If I read that correctly I am happy with it, but I hope the Minister will be able to say whether I am reading more into this paragraph than I should.
Secondly, in Amendment No. 27, which we are considering with this group, there is an addition to the end of line 27 concerning the giving of directions under subsection (2). The Secretary of State is obliged to lay a copy of any direction before the House within 28 days of giving it, unless he has notified the corporation to which it is given that he is of the opinion that it is against the national interest to lay it, or if he accepts the corporation's contention that it is against the corporation's commercial interests to lay it. I am not sure that there are precedents for that. The Minister of

State is nodding. I assume that if there are precedents they would have been in the original draft.

Mr. Kaufman: The hon. Gentleman created the precedent, because it was in response to a case that he made in Committee that we tabled this amendment.

Mr. Tebbit: Indeed. That is why I put it as gently as I did. I wonder whether the Minister can say in this case how it will be ensured that even if the direction is not laid before the House because of the national interest the security of it will be maintained by the corporation. Will there be any safeguard against the corporation revealing that such a direction has been given to it if it is a direction which it does not like?
In the past day or so, we have had certain explosions from the Chairman of British Rail because he is not very fond of Government policy. If a direction were given to one of the coroprations and the Minister decided that it was against the national interest that it should be laid before this House, what sanction would the Minister or the Government have against that direction being made public by the corporation itself?

Mr. Heseltine: I hope that the Minister will amplify a little the meaning of this amendment. On reading it and reflecting upon it, my feeling is that it is an amendment which apparently is desirable to have included in legislation of this kind but which, in practice, has no meaning of any sort.
When we come to consider what the Secretary of State would have power to deal with under this amendment in reality, we realise that he does not have any power to co-ordinate the activities of British Shipbuilders with the operations of the British shipping industry because he has no power over the British shipping industry.

Mr. Kaufman: That may be a valid point. But why, then, did the hon. Gentleman vote for the amendment now in the Bill which this one seeks to replace? The amendment moved by my right hon. Friend the Member for Sunderland, North (Mr. Willey) in Committee was carried against the Government because the hon. Member for Henley (Mr. Heseltine) led his hon. Friends to support it. That requires the Secrtary of State to


have full regard to the need to co-ordinate shipbuilding and shipping policies. If the hon. Gentleman is not satisfied with those words, why did he vote for them?

Mr. Willey: Mr. Willey rose—

Mr. Heseltine: No. I am not giving way to the right hon. Gentleman. Time is short. I had given way to the Minister—

Mr. Wigley: On a point of order, Mr. Speaker. Is it in order for the hon. Member for Henley (Mr. Heseltine) to question my hon. Friend about an amendment which I tabled, as my hon. Frend explained, and which was agreed to by the Committee despite the Government's opposition to it? It is now claimed—

Mr. Speaker: Order. The right hon. Gentleman knows that it is quite in order to ask a question. The answer that he gets is quite another matter.

Mr. Heseltine: The amendment in the name of the right hon. Member for Sunderland, North (Mr. Willey) which I supported was to bring about some co-ordination of the European aspects of policy, and I thought it important that that should be in the Minister's mind. But it is also important to look at this amendment. It appears innocuous enough, but, in reality—[Interruption.] If the songsters on the Government Benches below the Gangway want to get to their feet and render "The Red Flag", I shall be very happy to let them sing. That is all that they understand. However, the serious content of this debate is best pursued by discussing this amendment.
In reality, the only significance that the amendment has in practice is the impact that it will have on people with ships who are considering whether to stay on or to leave the British Register. That is the only impact that we should be considering.
In order that there should be no false doubts, it would help if the Minister could make it clear that the Government recognise how limited are the powers that they could claim to have over the shipping industry, that they have no wish to extend those powers, and that anyone joining the British Register will not be co-ordinated with the British

shipbuilding industry, but will be free to pursue the commercial interests of his company operating on the British Shipping Register without pressures being brought which he might consider to be against his commercial interests. If that assurance is not given, the only consequence will be a flight from the British Register or a reluctance to join it, and that will be harmful to the overall national interest. As that is the only practical effect of the amendment it would be helpful if the Minister could clarify it.

Mr. Willey: I say once again that this was a matter that was very fully discussed in Standing Committee. It had the general support of the Committee.
With regard to the point about co-ordination, the amendment does not say a word about coercing anybody.
I suspect that the Opposition are afraid to reach the next amendment, because it is an Opposition Front Bench one and they will be exposed because they have not sufficient Members here to support them. Therefore, we are having an interesting discussion on my present amendment.
"Co-ordination" means "to coordinate". We can deal only with British shipbuilders because the Secretary of State has powers to deal only with British shipbuilders. But coordination is mutual. One can facilitate it only if there is co-ordination between two parties. There is the explanation of the first leg of the amendment.
Employment, is, from my point of view, a much more important issue. I have lived in and represented a shipbuilding area for a long time. We were a distressed area, a development area, and now an assisted area. I believe that any real regional policy must be centred on the basic industries of the region. I think that if we had had any full and proper development area policy over the past years it would have been centred on shipbuilding, and if we had concentrated on that we might have taken a far bigger share of the world market that existed then. Instead, we built factories for light industry and so on. The basic industry where basic capital investment was needed in my constituency was shipbuilding. That is why I am very anxious to make it quite clear


that in giving directions to British Shipbuilders this should be a factor to be taken into account. If only the investment put into new factories in my constituency had been put into the basic industry of shipbuilding we would have had a far larger share of the world market.
I think this must satisfy the purposes of the hon. Gentleman in having an interesting discussion on this amendment. The Secretary of State indicated in one of our recent debates that he regards the clause as a very important part of the present Bill, and I think it is, too. The Bill is considerably strengthened by this provision. I do not know whether the hon. Gentleman wants to take up a few more seconds or whether he wants me to take them up.

Mr. Anthony Nelson: I wonder whether the right hon. Gentleman would care to refer to the example of Greenwell's in his constituency, where some 400 workers have been made unemployed. It is a State-controlled firm and seems to exemplify all the worst possible aspects of State ownership.

Mr Willey: I am fighting very hard for the people who lost their jobs in Green-well's. What we do not like are people who know nothing about it, such us the hon. Gentleman, trying to make political capital. We do not want it and it does not help us. If the hon. Gentleman can do anything to help, let him help.

It being Eleven o'clock, Mr. SPEAKER proceeded, pursuant to the Orders [20th July and yesterday], to put forthwith the Question already proposed from the Chair.

Question agreed to.

Mr. SPEAKER then proceeded, pursuant to the Orders [20th July and yesterday], to put forthwith the Questions on amendments, moved by a Member of the Government, of which notice had been given.

Amendments made: No. 251, in page 7, line 25, leave out 'directions' and insert 'direction to either Corporation'.

No. 252, in page 7, line 26, leave out
'shall consult the Corporation to which they are to be given'

and insert—

'(a) shall consider all factors relating to that Corporation that appear to him to be relevant to the proposed direction, and
(b) shall consult the Corporation'

No. 253, in page 7, line 27, at end insert—
'(3B) Before giving any such direction to British Shipbuilders, the Secretary of State shall have full regard to the need—

(a) to co-ordinate the operations of British Shipbuilders with those of the British shipping industry;
(b) to take account of any shipbuilding policy for the time being adopted by any international organisation of which the United Kingdom is a member;
(c) to ensure that British Shipbuilders is able to compete in world markets on equal terms with its competitors in other countries; and
(d) to take account of any special considerations relating to parts of the United Kingdom and in particular, but without prejudice to the generality of those considerations, relating to employment'.

No. 14, in page 7, line 27, at end add—
'(4A) When the Secretary of State gives a direction under subsection (2) above, he shall lay a copy of it before each Housc of Parliament within 28 days of giving it, unless he has notified the Corporation to which it is given that he is of opinion that it is against the national interest to lay it or that he accepts the Corporation's contention that it is against the Corporation's commercial interests to lay it'.—[Mr. Kaufman.]

Clause 5

DUTIES OF THE CORPORATIONS TO REVIEW AND REPORT ON MANAGEMENT OF THEIR AFFAIRS

Amendment made: No. 317, in page 7, line 28, leave out 'Each Corporation and insert 'British Aerospace'.

No. 318, in page 7, line 28, leave out 'relevant' and insert 'aircraft industry'.

No. 15, in page 7, line 35, leave out from 'organised' to 'and' in line 39 and insert
',taking account of the desirability of promoting the largest degree of decentralisation of management consistent with the proper discharge of its functions, and what steps are necessary in order effectively to promote industrial democracy in its undertakings and the undertakings of its wholly owned subsidiaries'.

No. 319, in page 7, line 41, at end insert
'and the action it proposes to take in the light of those conclusions'.

No. 320, in page 7, line 41, at end insert—
'(1A) British Shipbuilders shall, forthwith after the shipbuilding industry vesting date and subsequently from time to time when it considers it appropriate or the Secretary of State so requires—

(a) undertake a review of the affairs of the Corporation and its wholly owned subsidiaries for the purposes—

(i) of determining how the management of the activities of the Corporation and those subsidiaries can most efficiently be organised, and what steps are necessary in order effectively to promote industrial democracy in its undertakings and the undertakings of its wholly owned subsidiaries; and
(ii) without prejudice to the generality of sub-paragraph (i) above, of seeking the largest degree, consistent with the proper discharge of its functions, of decentralisation of management and decision-taking to separate profit centres in the shipbuilding and ship-repairing areas of Great Britain, and in particular of Scotland and Wales, and without prejudice to the generality of the foregoing, in relation to sales, pricing, production, the formulation and implementation of investment programmes, manpower planning and management, industrial relations, and responsibility for financial performance; and
(b) make a report to the Secretary of State upon the Corporation's conclusions arising from the review and the action it proposes to take in the light of those conclusions.'.

No. 321, in page 7, line 43, after '(1)', insert 'or (1A)'.

No. 16, in page 7, line 44, after 'date', insert—
'not more than 6 months after the relevant vesting date'.

No. 322, in page 8, line 2, after '(1)', insert 'or (1A)'.

No. 17, in page 8, line 3, leave out 'seek consultation with' and insert 'consult'.

No. 323, in page 8, line 6, after '(1)', insert 'or (1A)'.—[Mr. Kaufman.]

Clause 6

MACHINERY FOR SETTLING TERMS AND CONDITIONS OF EMPLOYMENT ETC.

Amendment made: No. 18, in page 8, line 20, leave out 'seek consultation with' and insert 'consult'.—[Mr. Kaufman.]

Clause 7

FORMULATION OF THE CORPORATIONS' POLICIES AND PLANS AND CONDUCT OF THEIR OPERATIONS.

Amendments made: No. 211, in page 9, line 1, after 'Corporation' insert
'after consulting any relevant trade union,'—[Mr. Ron Thomas.]

No. 19, in page 9, line 2, after 'year' insert
'other than that which it is constituted'.—[Mr. Kaufman.]

No. 212, in page 9, line 8, at end insert
'(bb) employment of persons;'—[Mr. Ron Thomas.]

No. 20, in page 9, line 22, leave out from 'State' to end of line 23.

No. 21, in page 9, line 37, leave out ` subsection (3) above' and insert 'this section'.

No. 22, in page 9, line 40, at end insert
'and "year" means the period of 12 months beginning on 1st January'.—[Mr. Kaufman.]

Clause 10

FINANCIAL DUTIES OF THE CORPORATIONS

Amendments made: No. 23, in page 11, line 6, leave out 'may be' and insert 'possible'.

No. 24, in page 11, line 8, leave out 'and each' and insert—

'3A) Each'.

No. 25, in page 11, line 9, leave out
'such determination of which it is given notice during that year'
and insert
'determination made in relation to it under subsection (I) above, other than a determination which was wholly superseded before the beginning of the accounting year to which the report relates'.—[Mr. Kaufman.]

Clause 11

BORROWING POWERS OF THE CORPORATIONS AND THEIR WHOLLY OWNED SUBSIDIARIES

Amendments made: No. 26, in page 11, line 24, leave out 'to (6)' and insert 'and (5)'.

No. 27, in page 11, line 27, leave out 'and (3)' and insert', (3) and (3A)'.

No. 28, in page 11, line 27, leave out from 'below' to end of line 31.

No. 29, in page 12, line 11, at end insert—
'(3A) Each Corporation may borrow from any of its wholly owned subsidiaries, without any consent, approval or other authority.
(3B) It shall be the duty of each Corporation to secure that none of its wholly owned subsidiaries borrows otherwise than from the Corporation or from another of its wholly owned subsidiaries except with the consent of the Secretary of State and the approval of the Treasury'.

No. 30, in page 12, line 34, leave out subsection (6).

No. 31, in page 13, line 3, leave out
'in circumstances falling within subsection (6) above'
and insert—

'(i) by a Corporation from one of its wholly owned subsidiaries, or
(ii) by one of a Corporation's wholly owned subsidiaries from another such subsidiary or from the Corporation;

No. 209, in page 13, line 10, at end insert—
'(bb) it is a loan guaranteed under section 10 of the Industry Act 1972 (construction credits for ships); or'.—[Mr. Kaufman.]

Clause 15

THE COMMENCING CAPITAL OF EACH CORPORATION

Amendments made: No. 32, in page 16, line 24, leave out from 'applies' to 'and' in line 26.

No. 33, in page 16, line 30, leave out from 'applies' to end of line 32.—[Mr. Kaufman.]

Clause 17

ACCOUNTS AND AUDIT

Amendment made: No. 34, in page 18, line 11, leave out subsection (2).—[Mr. Kaufman.]

Clause 18

ANNUAL REPORT

Amendments made:

No. 35, in page 20, line 2, leave out from 'has' to end of line 5 and insert
'given a notice concerning it under section 4(4A) above and has not revoked it.
(2A) The Secretary of State may at any time revoke a notice under section 4(4A) above by notice given to the Corporation concerned.'.

No. 36, in page 20, line 6, leave out
'of a Corporation under subsection (1) above'.

No. 37, in page 20, line 8, leave out from 'Corporation's' to 'section' in line 9 and insert 'duty under'.

No. 38, in page 20, line 10, at end insert—
'(3A) A copy of the register under section 1(8A) above maintained by the Secretary of State in respect of the Corporation shall be annexed to each such report.'.—[Mr. Kaufman.]

Further consideration of the Bill stood adjourned.

Bill, as amended (in the Standing Committee and on Recommittal), to be further considered Tomorrow.

POLICE DISCIPLINARY OFFENCES

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stallard.]

11.1 p.m.

Mr. Michael McNair-Wilson: I am in some difficulty in this debate because apparently there is no Minister here to reply to it. Perhaps I could therefore seek your guidance, Mr. Speaker.

Mr. Speaker: There is an answer to that question that I need not provide since I see that the Minister has just arrived.

Mr. McNair-Wilson: I am grateful for this opportunity to discuss the subject of police disciplinary offences. I would start by expressing my admiration for the police in the difficult role they have to fulfil in our society. Their's is a role and a duty which has become more difficult and dangerous as crime figures have soared and as criminals have resorted to the use of violence, both in terms of weapons and in terms of assault upon persons. In turn this has forced the police to modify the ways in which they deal with the problems of crime in our society.
Indeed, it is remarkable that they have been able to modify their approach while at the same time maintaining the respect and the co-operation of the general public to the extent that we all still consider that the policeman, wherever we may see him, is essentially our friend. Of course, as I said, the type of criminal the police have to deal with is not only more violent but in some cases more ruthless and more unscrupulous than those of a previous generation. The question of scruple comes into play in


particular in the way in which those criminals when they appear before the courts are dealt with by the courts.
Many top policemen—at the moment I have in mind Sir Robert Mark in particular—feel that the proceedings of the courts are such as to give the criminal undue—unreasonable, shall we say—licence and therefore often to avoid the sentences which Sir Robert Mark feels are justly their due. It comes to a question whether the courts are tilted overmuch in favour of the villian.
It follows that if someone as distinguished as Sir Robert Mark makes those comments, he is undoubtedly reflecting the views held by policemen below him and of the constabularies of our country. From that it probably follows that policemen, if they feel that the courts are not giving them the crack of the whip that they feel their deserve, might look for opportunities of remedying the balance by the way in which they act before a person is charged, before the suspect comes within the rules of custody.
On 5th July as reported in The Guardian, Lord Justice Lawson summed up the position in these words:
The phrase 'a man is helping police with their inquiries' is a polite euphemism for 'a man is being held illegally while the police decide whether they have enough evidence to justify a charge'.
The article, by Mr. Michael Zander, went on to say:
The judge warned the police that they had no right to keep people simply for questioning. They must either arrest somebody or not. If a subject was not under arrest he was free to go.
Mr. Zander then summed up the judge's remarks in these words:
If this is right, a suspect must be charged as soon as he is taken into custody—often before the police know whether there is enough evidence against him. Moreover under the Judges' Rules when charged, questioning is supposed to stop.
In fact, Mr. K. W. Lidstone, Lecturer in Law, University of Sheffield, touched on the same point in the Criminal Law Review of November 1975, when he wrote:
The attitude of the police seems to be that one can take liberties and providing they do so in a proper case the courts will support them. We then have a creeping tide of common law which gradually erodes the liberties of the individual. If the courts were to adopt a

harder line it would no doubt mean that the task of the police becomes harder. Few civil libertarians would want that. However, it would make Parliament take up the responsibilities society places on it.
I want to talk about some of these responsibilities in the light of a case which affects a constituent of mine, Mr. George Montgomery, a stable lad in a training establishment in Lamboum. But before I do that, I want to quote again from Mr. Michael Zander, because on this most important point he says:
For years the police have been breaking the rules more or less openly—sometimes holding suspects incommunicado for days before either charging them or allowing them to go".
So my first question to the Minister is who decides when breaches of the rules in terms of charging are such as to require disciplinary action.
Returning to my constituent's case—Mr. Montgomery was under suspicion as long ago as 1971 for doping horses at Haydock Park because he had overlooked some duties relating to a horse for which he was responsible and had decided to put the matter right by visiting the horse in the early hours of the morning—20th August—to see that it had the provision he should have given it earlier.
At roughly that time the Merseyside Police had the responsibility for investigating the doping of horses and they found out that Mr. Montgomery had visited the horse in the early morning. They wondered, perhaps not unnaturally, why a stable lad should visit a horse in the early hours of the morning. They came to the conclusion he was nobbling the horse. So on 31st October 1971 they went to see Mr. Montgomery.
At about lunch time they started their investigation and inquiry. They questioned him throughout the afternoon and evening and decided that there was a prima facie case against him. They charged him at Epsom police station and took him north to Liverpool. During the journey they continued with their ruthless and rigorous cross-examination. That cross-examination was to continue until 3.30 the following morning, and it ended 12 hours or more later when Mr. Montgomery was punched, struck on the cheek and hit on the mouth. Having taken that action against him and having failed totally to make him change his statements


of innocence, they then apologised and the following morning returned him to his father's house in Liverpool.
To quote his father, George Montgomery returned home in
a state of shock, incoherent, with his mouth bruised and puffed up.
One may say that if Montgomery had broken down that would have been reason enough for the police to have made that assault. But he did not break down. In a subsequent civil action against the police Montgomery was awarded £2,500
in respect of the treatment he had received in the course of the inquiry.
But Mr. Montgomery did not have to wait for the end of his action for that settlement because four days after it had started counsel for the police advised them that it was better to offer him a settlement and finish the case.
So the situation arose in which my constituent Mr. George Montgomery was charged, cross-examined ruthlessly for hours, was struck, and received damages from the police for the injuries he suffered from two police officers. Yet although one might say that these police officers deserved disciplinary action to be taken against them, no such action is to be taken. Earlier in my speech I said that according to the Judges' Rules once a person is charged the questioning ends. But in Mr. Montgomery's case it did not and he had to suffer assault.
It is conceivable that I should not have known about the case because it happened in 1971 and I have represented Newbury only since 1974. That might have been the case but for the Stable Lads Welfare Trust, and in particular Mr. Alfred Sherman who was so concerned about the case that he brought it to my attention and I took it up with the Home Office. I had considerable correspondence with the Minister of State, Lord Harris of Greenwich.
I might have let the matter lapse after one or two of his letters, but on 18th June this year I received a letter in which Lord Harris described why the police had not taken disciplinary action in the matter and why the Home Office felt unable to intervene. The letter contained the following paragraph, and it was because of this paragraph that I sought tonight's Adjournment debate. It reads

Prior to the trial an undertaking was given that notwithstanding the outcome of the civil action, no disciplinary proceedings would be contemplated against any member of the Merseyside Police joined in the action.
In effect, whether Montgomery had won his case or not, the police would get off scot free, that is, the two police officers who assaulted him and any other policemen who might have been involved.
Tonight I ask the Minister whether she will tell me how it is possible for police officers to assault an innocent man and yet escape any form of disciplinary proceedings. The Minister will know that the chief constable who made the decision that no disciplinary proceedings should take place, was Mr. James Haughton, now Sir James Haughton, Chief Inspector of Constabulary, and that he has never offered any reason in public why no disciplinary action was taken against those officers.
I suggest to the Minister that, even though I have strong views about the police and the service they give, it can do nothing for public confidence if any one of us can feel that we, like Mr. Montgomery, might be subjected to cross-examination and assault, even though we are innocent. I therefore ask the Minister whether the then Chief Constable of Merseyside, Mr. James Haughton as he was, told the Home Office why he felt that no disciplinary proceedings should be taken against the officers, or whether the Home Office, having heard about the case, asked the Chief Constable for his reasons. I do not think that my concern or that of anyone else interested in the subject of police powers and civil liberties can be satisfied when an innocent man can be punched and hit by police officers without there being rather more explanation than the present Chief Constable of Merseyside—who I think was Sir James's assistant—gave in a statement which said
there were good reasons for it".
When asked by The Sunday Times what the reasons were he refused to say.

11.17 p.m.

The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill): I join in the initial remarks of the hon. Member for Newbury (Mr. McNair-Wilson) and praise the work of the police. The answer to the specific question he asked will emerge as I deal


with his other points. On the general subject of the handling of police disciplinary cases, the hon. Member has related his remarks largely to a case concerning police inquiries involving a stable lad, his constituent, Mr. Montgomery.
The case as a whole spans a period of time from the point at which the inquiries involved Mr. Montgomery to the time at which a civil action brought on his behalf was settled out of court. That is a period of no less than four years. That might help to put the time span in perspective. This has been a particularly long case. During that period, because of changes in police areas consequent upon local government reorganisation, police responsibility for the case passed from the Lancashire Constabulary and the Lancashire Police Authority to the Merseyside police and the police authority for that force.
There are general considerations and statutory provisions which are essential and relevant factors to be borne in mind when formulating any conclusions about the outcome of the case. I shall briefly state those considerations, which will provide the answer to the specific question asked by the hon. Member. First, the chief officer of police concerned is entirely responsible for the investigation of alleged criminal offences and for the disciplinary control of his force. Parliament has approved a discipline code for police officers and discipline regulations which lay down procedures for handling discipline offences and the punishments that may be awarded by the chief officer if he finds that there has been a disciplinary offence.
There is the power of appeal to the Home Secretary against the chief officer's decision in any disciplinary proceedings. This is the only situation in which the Home Secretary might be concerned in any individual disciplinary case. Similarly it is for the chief officer, and only for him, to decide who should be promoted in his force.
As the House is aware, the chief officer is also responsible under the Police Act 1964 for the investigation of complaints by members of the public against officers of his force. Most often, the recording and investigation of a complaint will ordinarily follow within a short time of the receipt of the complaint, though, as the House knows from the recent debates

on the Police Bill, there are circumstances in which this may not always be feasible or desirable.
One such circumstance is where there are related civil proceedings. If a complainant indicates that he is minded to institute civil proceedings in respect of the matter he has complained of, there are obviously difficulties in the way of the police conducting a full investigation of the complaint in accordance with the usual procedures under the Police Act and the discipline regulations, the first step in which is normally for the investigating officer to interview the complainant to obtain full and precise details of his complaint, and similarly, to interview the complainant's witnesses, if there are any.
The chief officer concerned is also liable in respect of alleged torts committed by his officers, and, in addition, Section 48 of the Police Act 1964 empowers the appropriate police authority to pay the costs incurred by an officer in such proceedings and not recovered by him in the proceedings, to such extent as it may think fit. Further, the police authority is similarly empowered to pay any damages and costs awarded against the officer in such proceedings.
In conclusion to my general remarks in respect of all these matter, the responsibility rests wholly with the chief officer and—as indicated in regard to costs in civil proceedings—with the police authority. These are not matters in which the Home Secretary has any power to intervene.
I turn now to the inquiry which gave rise to the incident which resulted ultimately in the out-of-court settlement last October of the action brought by Mr. Montgomery.
The hon. Gentleman knows full well the sequence of events of this long case. Writs were eventually received by the clerk to the Lancashire police authority on 2nd May 1972, and were later served on the two officers. The writs alleged wrongful arrest, false imprisonment and assault and battery at Epsom and in Lancashire. The officers denied the allegations of assault and the police authority, following representations by the officers' legal representatives, and in the light of all the relevant evidence available, decided that the officers should be financially supported in their defence to the


action, and indemnified against any damages and costs that might be awarded against them.
This is not of course in any way remarkable. It was a decision in accordance with the provisions of Section 48 of the Police Act 1964, and such indemnities in civil actions against police officers are not uncommon. The indemnity was subsequently confirmed by the Merseyside police authority after the officers' transfer to its force on local government reorganisation on 1st April 1974.
Before the hearing of the civil action, as a result of a further request by the officers' legal representatives, the Chief Constable also gave an undertaking that no disciplinary proceedings would be contemplated against any member of the force who might be joined in the action. We understand that the view was taken by the Chief Constable that, in view of the decision of the respective police authorities to indemnify the officers against costs and damages and considering the long passage of time since the incident occurred—some four years—it would be invidious to subject the officers to formal disciplinary action.
As I have said, these were the considered decisions of the responsible authorities. They were decisions which they were legitimately entitled to make and as regards in particular the undertaking relating to disciplinary proceedings, a decision which in the light of all the circumstances and the sequence and timing of events the Chief Constable considered could be validly justified.
The hon. Member has made the point that there was no formal investigation of a complaint of alleged assault on Mr Montgomery whilst in police custody. Here, however, it is relevant to remember that when any complaint of this nature first came to the notice of the police, Mr. Sirrett's solicitors said that it was not desired that Mr. Montgomery should be interviewed. Mr. Sirrett's purpose was to obtain an apology; and this was given. The investigating officer was not aware of Mr. Montgomery's whereabouts, and within a relatively short time events took a different turn in the shape of the infor-

mation from other solicitors instructed on Mr. Montgomery's behalf that civil proceedings were being instituted.
The situation as it appeared then therefore was that Mr. Montgomery had not pursued a complaint under Section 49 of the Police Act 1964; nor did he bring criminal proceedings against the police in respect of an alleged assault. He had evidently decided instead, as he was perfectly entitled to do, to pursue a civil remedy through the courts.
In the event, the civil action went ahead and was concluded in October 1975, when by consent the action was withdrawn on terms which included payment to the defendant by the police authorities of £2,500 and his costs. The terms of the settlement were explicit in that for their part the defendants recognised that at all times the plaintiff, Mr. Montgomery, was wholly innocent and never involved in any offence. They were at the same time also explicit in that for his part the plaintiff accepted that at the time the police inquiries were initiated the information in the hands of the police required thorough investigation both in the interests of the public and of horse racing generally. Further, it should be noted that the agreed terms of the settlement entailed no admission by the police of his allegations of assault: in essence the sum paid was in respect of inconvenience suffered by the plaintiff in the course of the said inquiry.
I accept that the Chief Constable's undertaking to the officers that there would be no disciplinary proceedings was unusual. This was said plainly in the full reply which was sent by my noble Friend the Minister of State.
It was, of course, as the hon. Member knows, a decision entirely within the discretion of the Chief Constable who alone is responsible for the disciplinary control of his force: it is final and not now open to review. However, I think it will be clear to the House from what I have said about the facts and sequence of events in this case that is was an unusual case. The Chief Constable was no doubt confronted with a situation in which he had to make a difficult decision.
As I have said, in view of the decision of the respective police authorities to indemnify the officers against damages


and costs, and considering the long passage of time—over four years—since the original incident, the Chief Constable took the view that it would be invidious at the end of the day to initiate disciplinary proceedings. That was his

decision, legitimately made after full consideration.

Question put and agreed to.

Adjourned accordingly at half-past Eleven o'clock.

Second Reading Committee

The Committee consisted of the following Members:


Sir Donald Kaberry (in the Chair)


Bennett, Dr. Reginald (Fareham)
Hunt, Mr. David (Wirral)


Chalker, Mrs. Lynda (Wallasey)
Lester, Mr. Jim (Beeston)


Crouch, Mr. David (Canterbury)
Lomas, Mr. Kenneth (H udders field,West)


Crowther, Mr. Stan (Rotherham)



Cunningham, Mr. George (Islington, South and Finsbury)
Moonman, Mr. Eric (Basildon)



Ovenden, Mr. John (Gravesend)


Deakins, Mr Eric (The Under-Secretary of State for Health and Social Security)
Shepherd, Mr. Colin (Hereford)


Harper, Mr. Joseph (Pontefract and Castleford)
Thompson, Mr. George (Galloway)


Hatton, Mr. Frank (Manchester, Moss Side)
Vaughan, Dr. Gerard (Reading, South)



Mr. W. A. Proctor, Committee Clerk.

NATIONAL HEALTH SERVICE (VOCATIONAL TRAINING) BILL [Lords]

10.30 a.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I beg to move,
That the Chairman do now report to the House that the Committee recommend that the National Health Service (Vocational Training) Bill [Lords] ought to be read a Second time.
The Bill which I commend today to the Committee is a simple but significant measure aimed at improving standards in primary care. Its purpose, which is strongly backed by the academic and professional bodies—including the British Medical Association—is to tighten the entry requirements for becoming a general practitioner principal in the National Health Service by introducing a period of compulsory post-registration

"vocational training". The Bill marks a development not only in the National Health Service, but in the recognition of general practice as a specialty in its own right.
There is no need for me to remind the Committee that the Bill comes before us at a time of severe restraint in public expenditure. However, as the Government's recent consultative document on Priorities for Health and Social Services in England pointed out, while it is essential at any time to work out our priorities carefully, at such time of severe restraint it is all the more imperative that we should choose the right priorities. The same document stressed the rôle of primary care in helping to relieve pressure on hospital and residential services and


described as a "key element" in the strategy
to maintain and where necessary increase the level of training and to improve the ways in which skilled manpower is used".
This Bill reflects both these priorities: the importance of primary care and the increased emphasis on training.
Vocational training for general practitioners has existed for some years now on a voluntary basis, and its development has been encouraged by successive Governments. Many doctors already embark on organised schemes, comprising two years in appropriate hospital posts and one year as a trainee in general practice. Others, after a period in hospital, decide that they wish to take up general practice as a career, and also take a trainee year in general practice. In 1970, there were 211 trainees in England; in 1975, about 660—a most encouraging increase. Wales and Scotland have seen a similar development. The Government, strongly backed by the medical profession and other interested bodies, believe that the time has now come to increase the momentum already generated by making vocational training for new general practitioner principals compulsory from a future date to be agreed with the profession. I shall return to the question of timing later.
I should perhaps make clear now those to whom it is proposed the new compulsory arrangements will not apply. They will not apply to general practitioners already providing the full range of general medical services when the new arrangements start. They will not apply to doctors entering general practice as locums or assistants. There will be other groups as well who for some reason should not come under these arrangements but these will include the general run of family doctors providing the normal range of services.
We shall also need to consider very carefully the position of those doctors not in general practice when the new arrangements start but whose experience may warrant particular consideration; for example, those who have previously been general practitioner principals or have had considerable hospital experience. This is something that we shall

be looking at closely in consultation with the medical profession.
The regulations will, of course, also need to take account of the wider European scene and the agreement on free movement of doctors. With that in mind we have already discussed our plans with our colleagues in the EEC, in the forum of the Committee of Senior Officials in Public Health. Already it is clear that our EEC partners warmly welcome the proposals in the Bill and the contribution that it will make to the development of general practice as a specialty within the Community. Some EEC countries already require a measure of vocational training before their general practitioners can work within their social insurance schemes.
I turn now to the mechanics of the legislation, and to explain these I should first remind the Committee of the current procedures by which a doctor—who must already be a fully registered medical practitioner—sots up as a general practitioner principal in the NHS. First, he must apply to a family practitioner committee, administering these arrangements on behalf of an area health authority, for inclusion in its list of doctors undertaking to provide general medical services in its area. The family practitioner committee refers the application to the Medical Practices Committee for a decision. The Medical Practices Committee may refuse the application, but only on the grounds that there is already an adequate number of medical practitioners undertaking to provide general medical services in the area or part of an area concerned. Thus, the family practitioner committees, which receive the applications and make subsequent arrangements with those doctors whose applications have been accepted, have no power to accept or refuse applications, and the powers of refusal of the Medical Practices Committee are confined by law to the grounds of adequate provision in the area.
What the Bill does is to extend the powers of the Medical Practices Committee to refuse applications so that after the appointed day it can, and indeed it must, refuse applications from doctors who have not been vocationally


trained and who are not entitled to exemption. The exemptions will, of course, cover doctors providing general medical services on the appointed day and subsequently moving to another family practitioner committee area.
Because the Bill extends to Scotland, I should mention here that arrangements there are similar except that they are operated by the health boards, not family practitioner committees, and that there is a separate Scottish Medical Practices Committee; the Bill makes suitable corresponding provision.
I come now to the very important question of timing. The Bill provides for the new powers of the Medical Practices Committee to operate after an appointed day—that is a day appointed in regulations—and there are a number of factors to be taken into account before a decision is made on what that date shall be. We cannot commence these new arrangements tomorrow. The full period of training will be three years, and clearly in the regulations we must give doctors at least three years' warning so that they can plan their careers to comply with these statutory requirements. The medical profession has proposed 1980 as the target date for the full three years' training requirement and this will be in our minds when consulting on the regulations.
The Committee will wish to know something of the kind of training that it is proposed to prescribe under the powers in the Bill. Let me preface my remarks by saying that in laying down details in the regulations we shall want to consult very closely with the medical profession and the educational bodies on these matters. But we expect the general pattern to follow the pattern of training at present undertaken voluntarily by many young doctors; namely, a period in hospital, normally in senior house officer posts, and a period attached to an established general practitioner who has been approved by the general practice sub-committee of the regional committee for postgraduate medical education. This pattern of voluntary training is greatly influenced by the requirements for the vocational training allowance, at present payable to principals during their early years in practice. These include three years in hospital posts—including the pre-registration house officer year—

and one year as a trainee in general practice. During the hospital period the doctor occupies a post in a number of specialties. He may spend either six or 12 months in each of several specialties, so as to get the broad base of experience so valuable to a general practitioner. There are some posts which provide for rotation through a number of departments for short periods. In order to qualify for the allowance, he must include at least six months in two or more specialties from a specific list which includes general medicine, chest medicine, traumatic surgery or accident or emergency work, obstetrics and gynaecology, paediatrics, psychiatry, geriatrics, otorhynolaryngology, dermatology, ophthalmology and anaesthesia. It may be that when we consult the profession it will wish to amend these criteria in the light of experience before adopting them as the basis of compulsory arrangements, but I hope that that gives the Committee the general picture.

Mr. Kenneth Lomas: I appreciate that my hon. Friend is to have consultations with the EEC, but what consultation has been taking place with junior doctors, consultants, other people inside the health service and the trade unions on this matter? Perhaps my hon. Friend would like to elucidate that. He may have had two hours' sleep. I have had only one hour. He may be better for it.

Mr. Deakins: I wonder whether I could crave my hon. Friend's indulgence. I shall come to the question of consultations in a moment. There is quite a lot that I can say about consultations, and I want to give the Committee all the relevant information about the processes through which we have gone in consulting people and organisations. Perhaps I might be permitted to return to what I was saying.
Whilst working in hospital, the potential general practitioner does the same kind of work as his colleagues who are planning a hospital career—he is in effect a hospital junior in the specialty. However, in addition he may throughout his training attend special lectures and courses arranged by the local clinical tutor in consultation with the regional postgraduate dean and the general practice sub-committee. During the year in


general practice, the trainee gains practical experience of the work of the primary health care team, the links with local authority services and the whole pattern of the organisation and delivery of primary health care. He will have an individual training programme designed for him by his trainer, and may participate in visits and consultations with the trainer or undertake them on his own.
At all times he will work closely with his trainer and other members of the team in order to gain a deeper understanding of the medical and social problems involved in the medical care of a patient and his or her family. He may be seconded for short periods to other practices, and recently some short experimental attachments to social services departments have been arranged. I hope those will become more widespread.
However, we do not wish to make the regulations so inflexible that all doctors must follow the same training pattern. For that reason, we have provided for an alternative route—the certificate of equivalent experience. A postgraduate medical dean and regional adviser in general practice may wish to experiment with different specialties, for example. Also, doctors coming from overseas need to have their experience individually assessed.
There is also the question of doctors who can train only part time. Clearly, the regulations will need to provide for part-time training, and the Bill requires them to be framed so as to allow the prescribed experience to be acquired without undertaking whole-time employment. As far as administrative arrangements are concerned, part-time junior hospital posts already exist, but we shall be emphasising to health authorities the importance of planning for the needs of these potential general practitioners. Similarly, part-time training in general practice also occurs and we see no problem in extending this. We shall, of course, keep the operation under review.
A doctor who has completed the prescribed training or has had equivalent experience will need a certificate to support his application to the family practitioner committee, and professional committees will be responsible for issuing these. The detailed arrangements will of course be subject to full consultation.
There is also the question of appeals. Clearly, it should be possible to appeal against a refusal on the part of such a committee to issue a certificate of prescribed or equivalent experience. Committees having such appeals will be professional bodies set up after full consultation with the medical profession. There will, of course, be no appeal against a refusal by the Medical Practices Committee to admit a doctor to a family practitioner committee list on the ground that he has not had the necessary experience, whether prescribed or equivalent, and is not entitled to exemption.
The Committee will appreciate that flexibility is essential to operate a system such as I have outlined and to allow also for future developments and variations. That is why we feel that the details of the training are more appropriate to regulations, where changes can be more readily made, than to the Bill itself—so the Bill before the Committee is a short one. In fact there are only five clauses, and I shall describe them briefly.
Clause 1 is the basic provision of the Bill. It contains the new powers of the Medical Practices Committee and the Scottish Medical Practices Committee to which I have already referred. Clause 2 contains the regulation-making powers, including the powers to prescribe details of the training to be required. There are also powers for medical experience judged to be equivalent to that prescribed to be accepted as meeting the requirement, to prescribe exemptions from the requirement and to make what administrative arrangements may be necessary. The remaining three clauses consist of minor amendments to other legislation arising out of the Bill, definitions of terms, authority for expenditure incurred by the proposals and the usual formal provisions for citation and extent. The Bill does not extend to Northern Ireland, but I understand that there is a proposal to introduce a similar requirement there by means of an Order in Council.
The reply to my hon. Friend the Member for Huddersfield, West (Mr. Lomas) is that we have had consultation in advance of presenting the Bill, and we shall have extensive consultations following the passage of the Bill into law.

Mr. Lomas: With whom?

Mr. Deakins: I make that point for the benefit of my hon. Friend. We have had preliminary views from the General Medical Services Committee, which is the appropriate body representative of all interests in the profession, the Royal College of General Practitioners and the Council for Postgraduate Medical Education. I should say, for the benefit of the laymen like myself on the Committee, that the General Medical Services Committee is an autonomous committee of the British Medical Association, recognised as representing the interests of general practitioners.
Further consultations will include representatives of the health authorities who usually invite a multi-disciplinary team to advise the Department. Our further consultations will be on a number of matters, such as administrative arrangements, training arrangements and categories, with the bodies that I have mentioned, but I do not rule out consultation with other interested bodies. Those that I have mentioned are the main ones to be consulted automatically on a Bill of this nature which affects the medical profession.

Mr. Lomas: I take the Minister's point, but what about the trade unions? Are they not being consulted? Members of NUPE and NALGO are employed in the NHS and individuals are represented in various professions in the service.

Mr. Deakins: They have not been consulted, and until now it has not been our intention that they should necessarily be consulted on a Bill which concerns solely general practice. General practitioners do not employ members of NUPE and NALGO, who work mainly in the hospital service. The Bill will have no impact on the hospital service, because two-thirds or three-quarters of general practitioners already do two years in general hospitals, and this is merely to extend that slightly.
The Bill will mean that people who go to their family doctor will go to someone who if he qualifies after the Bill is passed, will have been compulsorily trained. The Bill is an important step, a result of which should be a significant and ongoing improvement in the standards of primary care in this country. I am

sure that the Committee and the House will welcome the measure.

10.49 a.m.

Dr. Gerard Vaughan: I thank the Minister for his clear-cut and helpful description of the Bill and for presenting it in the way that he did. I also welcome your presence, Sir Donald, as Chairman. I think that under your experienced guidance this Committee will not only be entertaining, but entertainingly brief.
In welcoming the Bill—from a party point of view it is non-controversial—I would say that the extent of the agreement already felt about it is unusual. All the medical organisations are agreed about it, and my experience is that when a large number of medical people agree about something, it will be very good or very bad indeed.
In a way this is a historic Bill, because when it becomes law gone will be the days of the Cronin era when one could go out, put up a plate and see whether any customers came along. I welcome the change. It fits in with the general wish to raise the status of general practitioners, and it will give them a much more specialist rôle in our medical services.
The Minister said that it was a simple and significant Bill. It may be significant, but I am not sure that it is so simple. One worry about it is that so much is left to regulations that we are literally presenting the Minister with a blank cheque, or blank prescription, the details of which he will fill in later. I hope that things are not being left open to regulations because the Government do not know what they intend to do. We have had one or two examples of legislation covering up uncertainty about the action that the Government intend to take. We need more certainty, and to be reassured.
The Minister says that vocational training will be for three years and that he has no intention of extending it but the recent BMA conference thought that it should be five years. I believe that three years is long enough. I should like a list of those who were consulted about the Bill because when that was discussed in the other place the noble Lord said that the consultations were so extensive that he was not able to list all those


involved because that would be too complicated.
We should like to know more about the exemptions. I find it sinister when the Minister says that he has three groups in mind. Which three groups? I understand that people doing maternity services only will be exempted, as will those doing family planning. We should like to know what others will be exempted.
The Minister was disarmingly vague about the implications of the Bill for the EEC. I ask him to look at the debate in the other place. The noble Lord said:
…our lawyers advise that the medical Directives, when read with the Treaty of Rome, may be interpreted as meaning that doctors from other EEC countries cannot be subject to mandatory vocational training—[Official Report, House of Lords, 17th June, 1976; Vol. 371, c. 1396.]
The noble Lord went on to say, that BMA's legal view was that the position was not clear and that it must be clarified in the immediate future. The Minister did not make it clear today. Have we a right to make it mandatory for people from other parts of Europe. to undertake vocational training If not can we leave open the possibility of changing the Bill to include changes in EEC regulations?
We should like to know how people doctors, and I should like the Minister to confirm that it is the Government's intention that they can break off their training to have a baby and then return.
We should like to know how people will be selected. There will be grants amounting to £580 a year.

Mr. Deakins: When the hon. Member asks "How will people be selected?" I am not sure what he means, because this will apply to everyone who wishes to become a general practitioner.

Dr. Vaughan: That is exactly what I wished to ask. Will anybody who wishes to become a general practitioner automatically be able to apply for a grant and go in, or will the Medical Practice Committee select people? No one has any idea what effect this will have on recruitment. I asked my students the other day what they would do, In previous years, 50 per cent. would have wanted to go into the hospital

service. Now, 50 per cent. want to go into general practice, other than those who wish to emigrate. It may be that a training scheme of this kind will reduce, rather than increase recruiting. I see that £1 million is allocated, but already people are saying that that will not be enough. I should like to know exactly how much the Minister thinks the scheme will cost.
Those are the main points that I wanted to make. We welcome the Bill, and we support the principle, but I must make it clear that there are a number of detailed points about which we want to be satisfied before we give the measure our full support.

10.56 a.m.

Mr. Colin Shepherd: I should like, as a layman and a potential, but I hope not too regular, consumer of medical services, to say that I welcome this attempt to improve the standards that will be available to us in the National Health Service.
There are a number of points that I should like to mention. They are nontechnical, but I share the concern of my hon. Friend for Reading, South (Dr. Vaughan) that this is enabling legislation and is subject to variation by statutory instrument under the negative procedure.
I agree that there is no question of consultation with the trade unions, but, on the medical side, would it be possible for a schedule to be added indicating the make-up and constitution of the bodies that will have to be consulted before the regulations can be firmed up and setting out the means by which their views will be taken into account?
The Explanatory and Financial Memorandum says that there will not be any increase in public service manpower. The temptation within an administrative empire like the National Health Service is to create departments and departmental responsibility for training. There are already in area health authorities with teaching hospitals departments that cover training, and I cannot help thinking that the increased training facilities will lead to increased staff. I should like to hear what the Minister says about that, and especially how it is considered possible to increase the training commitment drastically without increasing the number of employees covering the administration


of training. That affects the money cost, which has been put at an annual level of £1 million. As my hon. Friend said, it has been suggested that that is not enough. Paragraph 7 of the Explanatory and Financial Memorandum says that small administrative costs may arise as a result of these proposals, but the answer is to get a closer estimate of the expenditure involved.
Those are two points to which I should like the Minister to give consideration because they are important in terms of principle and expenditure at a time of severe public expenditure restraint.

11.0 a.m.

Mr. George Thompson: Last night at about 2.30 a.m. I made a little self-denying ordinance for myself. I had prepared a five-minute speech for that debate and I thought that in order to assist the House I would forbear to make that speech. Little did I know that that debate would eventually end at 9.50 a.m. this morning and that I could have made my five minute speech. I have decided not to exercise that self-denying ordinance in this Committee. I am grateful that the fact that the blinds are drawn in this Committee will mean that nobody will be able to see my 11 o'clock shadow.
I am grateful to the Minister for referring to the separate arrangements in Scotland. All the consultations that I have had in Scotland point to the fact that the Scottish medical profession welcomes the Bill because it provides for compulsory vocational training for general practitioners and can also be said to meet the needs of patients. Therefore, it will he welcome from all sides.
I wish to pay a small tribute to the voluntary training scheme which has existed for a number of years. In my locality we have benefited for many years from the fact that a local general practitioner has acted as trainer in that scheme. Therefore, we have had the benefit of the services of young medical men. Admittedly they have taken their first steps in general practice in our area, but I am sure that that has not been to thy disadvantage of patients. Indeed, they may well have benefited from the advantage of those young doctors and the freshness of their new knowledge and skill. It appears that the move towards

compulsory training makes excellent sense.
At this stage in Scotland we are concerned mostly about whether finance will be provided for the necessary facilities required for training. A certain number of these trainees will be required to do their training in deprived areas in West Central Scotland. It worries us that well-motivated and trained doctors go into deprived areas and can—I do not necessarily say that this happens often—become overwhelmed by the conditions which they see around them and in which they work, and thus become disillusioned. There is a tendency in those areas for general practitioners to have rather more patients than do doctors in rural areas, but to have possibly less equipment with which to deal with the situation.
There is a need for improvements in the National Health Service in those areas not only for the sake of the trainee but for the sake of the trainer. Our medical schools give the ideals and the skills, and it is up to the community—and in this case ourselves—to provide the necessary facilities for the trainee to make the best of his training. We must help to encourage some of the young men and women to take up medical practice in deprived areas and, indeed, to look upon this work as a challenge, a medical crusade. We hope that many people will undertake that work, but I believe that we should give them especially generous help in those areas.
I wish to ask the Minister whether, even in the nation's present economic straits, there will be sufficient finance to provide better equipment and facilities, such as health centres, and so on, which will be required to give those young doctors a good send off in their careers as general practitioners.
With those remarks, I welcome the Bill wholeheartedly on behalf of Scotland.

11.4 a.m.

Dr. Reginald Bennett: I wish to join my hon. Friend the Member for Reading, South (Dr. Vaughan), who sits in the place of honour in front of me on the Opposition Front Bench, in extending our felicitous greetings to you, Sir Donald, on chairing our Committee. It is a great privilege for hon. Members


to see you presiding over our deliberations. We appreciate that very much indeed.
This Bill seems to me, at first blush, to be a wholly beneficial arrangement, having behind it excellent intentions. As I understand it, it does not prolong the training period in regard to general practitioners who are subordinate partners as they are generally understood, but applies only to those who wish to embark as principals in practice. That is my interpretation of the word "principal". It is therefore desirable that people should not be able to come into general practice straight from qualification, even though that may be the moment at which they know most in medicine. They should not be able to come in straight from qualification or from abroad and set up as principals in general practice without having established themselves, to the satisfaction of the community, as having acquired enough experience. If that is the case, I am certain that this is a beneficial measure and deserves our support. I have certainly heard no word of doubt about this matter so far from any part of the Committee.
It is curious that a dozen or so years ago I was asked to attend a dinner given by the Society of Apothecaries. It was a livery dinner, but I hasten to say that there was nothing hepatic about it. I was asked to speak on a topic that alarmed the members of that society; namely, the impending negotiations for Britain's entry into the EEC. Their fear was that should we join there would be a completely uncontrolled flow of doctors in all directions within the Community. I attempted to reassure the assembled company that we were not likely to allow into this country people with inadequate training or qualification to practise here.
Will the Minister underline the fact that the relationship with the other EEC countries will mean that we shall insist on fully mutual arrangements within the EEC? Will he seek to ensure that the EEC countries adopt these undoubtedly admirable principles of ensuring that the skills exist among those who seek to practise and who, so to speak, have the power of life or death?
I have only one misgiving about the Bill, and I hope that the Minister will

be able to dispel it. I refer to the kind of derogatory journalism that often attaches to these measures, to the effect that these are further examples of restrictive practices within an established profession, and that that is a thoroughly bad thing. It must be left to the Government's abilities to expound the virtues of this Bill and to demonstrate that it is not a way of shutting the door to aspirants to the medical profesion, but rather a method of seeing that those who practise practise well.
I support the Bill and wish it a speedy passage.

11.9 a.m.

Mrs. Lynda Chalker: I wish, first, to apologise to the Committee for not having been present at the beginning. I was down the corridor in a Committee considering a statutory instrument.
I did not hear the speech of my hon. Friend the Member for Reading, South (Dr. Vaughan), but it would appear that we do not in any way wish to oppose this Bill—for the simple reason that there is not very much meat in it. The Bill appears only to pave the way for the regulations that must follow giving the details of how vocational training should be carried out. Therefore, we await with interest to see the extent of the regulations that no doubt will come before us, probably later this year, and we shall look to see whether all the matters that are beginning to be raised on these issues are incorporated in them.
In seeking the wide acceptance of the idea of vocational training, I believe that these matters should not be entered into willy-nilly without canvassing the views of doctors about the extent of vocational training. We should see that information is exchanged on a wider basis than hitherto has been possible.
I was surprised to learn that a number of general practitioners have always felt it right to participate in one or two sessions in a hospital from time to time, but that they have undertaken that activity of their own free will. The difference between the voluntary vocational training that they are currently carrying out and what is now to be required through the Bill by the regulations is extreme. There is a good deal of work


to be done before we arrive at the regulation stage. I hope that some way will be found through the BMA and the Medical Women's Federation to assure the medical profession as to the right way of proceeding and taking into consideration those reservations that exist on the compulsory vocational training that we now require.
I wish to refer briefly to the 1972 Women Doctors Retainer Scheme and to ask the Minister whether the Government have any intention of extending that facility. I regard that scheme as a great step forward for women doctors, and the matter was referred to in Committee in another place on 28th June at column 641. The scheme provided for increased facilities to be offered to women doctors who wished to undertake part-time training posts. When the other place considered amendments to the Bill, their Lordships were most concerned that women doctors who are now required to undertake an additional three years in total vocational training should have the opportunity to undertake part-time work when perhaps the coming of a family might intervene in the total training period, which now extends up to eight or nine years.
The noble Lady, Baroness Young, tabled an amendment in the other place, which was accepted by the Government and which seeks to put at rest the minds of women doctors who go into practice but on a more part-time basis than their male colleagues. I ask the Minister to consult with the Medical Women's Federation in the coming months to ensure that the final regulations will not be subject to argument, because we cannot amend them. In other words, our homework must be wisely completed in this respect.
I wish to refer to the question of vocational training for general practitioners compared with post graduate training for some of the general practitioners who will be exempted from the three-year period—in other words, those who have been in practice for a considerable time. We are aware that apart from one or two sessions a week, many general practitioners hardly have the contact with the hospital service that we would wish them to have. I do not know whether the Minister is thinking of any way in which these exempted general practitioners can

be encouraged to do voluntarily at least a part of what is now being done by those general practitioners who have contracted to do a few sessions a week. That is particularly important, because there are departments of medicine which do not have enough junior staff.
I hope that the Committee will forgive me for saying this, but I have had the experience of an accident and emergency unit closing suddenly in my constituency. One wonders why it is that the general day-to-day work cannot be taken over by the kind of facility of which some GPs avail themselves already, by offering to give some sessions to a hospital for specific reasons. The older GPs can bring their experience to bear and they in turn can gain from contact with junior doctors who have been more recently trained and from contact with consultants, and thus keep going some aspects of our health service that is under the severest pressure that it has ever experienced. I hope that the Minister will turn his mind to that.
The EEC regulations must be clarified. It is my understanding that in the interval between the Bill being considered in another place and today the matter has not yet been fully clarified, but I shall be happy to be corrected if I am wrong, As long as EEC-trained doctors cannot be mandated to undergo vocational training in this country they will not be able to be principals here, however good their English standards or anything else. If we are to have free movement of labour between this country and the other EEC countries, that would create two levels of doctors, without the real reason for having two different levels. It may not be on a training basis. The vocational training in their own country may be just as good as ours. It may be that special regulations will be required if the EEC Directives will allow that. That is where the matter is totally unclear.

Dr. Vaughan: It could be the other way round. A doctor from the EEC could come here, put up a plate and set up a one-man practice, and there would be no way of stopping him.

Mrs. Chalker: My hon. Friend is correct. He could so do. The point is that before he can put up a plate presumably the Medical Practices Committee will have something to say about his ability to.


practise. Not long ago it was found that a motor mechanic in Scotland had spent six months advertising himself as a doctor and treating patients before it was discovered that he had no qualifications whatsoever. If that can happen north and south of the Border, the problems that could occur across the English Channel might be even greater. This matter is obviously in urgent need of clarification from the Minister.
We feel rather strongly that the Bill is a blanket cheque, and that until the consultations about the regulations are openly held, which I hope they will be, with all the interested parties listed in another place during the debate there we shall not really see how vocational training will work out in practice.
We give the Bill a welcome because anything that improves the primary care standards in our health service and removes the pressure from our hospitals and residential homes must, as the White Paper on Priorities for Health and Social Services said, be welcome. If it is to be done, there is no point in spoiling the ship for a ha'porth of tar. I look forward to being involved in the consultations that will come prior to the drawing up of the regulations. They are the heart of vocational training. I want to see the blood flowing freely through vocational training, and that will happen only if the preparation is thorough.

11.19 a.m.

Mr. Deakins: We have had a very interesting discussion. On behalf of the Government, I am glad that there has been a wide welcome for the provisions in the Bill and the principles involved. The hon. Member for Reading, South (Dr. Vaughan) asked a number of questions, and I shall do my best to answer them all.
I start with our intentions for the training period. The hon. Gentleman made the point that the BMA might want to lengthen this to five years. That is news to me. I accept what he says. The current target is three years because the medical profession has been pressing us strongly to bring this into effect as soon as practicable. That means that we shall be allowing for the fact that we have to give doctors a chance to decide what their specialties are to be, and what

arrangements are to be made in the future. There are a number of administrative arrangements to be made, and this scheme could not possibly be brought into effect before 1980. I do not believe that the medical profession will turn round in the course of consultations and say that three years is not adequate and that it wants five years. That seems unlikely.
On the question of resources and costs, to which the hon. Gentleman referred, in view of the potential resource costs, we should prefer, and the profession would prefer, if one is to judge from our consultations with it, that the training period should be for three years, and not for more. We have had consultations with three or four bodies. If the hon. Gentleman wishes I should be happy to provide him with a list of all the bodies that we consulted about the Bill. It goes rather wider than the major bodies that I have indicated.
The hon. Gentleman asked about exemptions, and this is an important matter. We have not yet agreed a list of exemptions with the medical profession, but we expect that it will include the following. First, those who have been in general practise some time in the past, although not actually practising on the appointed day. I should enter a caveat there. If someone had been in general practice in the 1920s and 1930s and had not practised for the past 20 years, the appropriate professional body would have to see whether he had the appropriate qualifications for service. Secondly, doctors in practice on the appointed day subsequent to moving to another family practitioner area. Thirdly, doctors contracting to provide maternity medical services only, and doctors contracting to provide family planning service only in the National Health Service.
There are two other groups that it will not be necessary to exempt, because the provisions of the Bill will automatically not apply to them. These are doctors already in general practice on the appointed day, and doctors entering general practice as locums or assistants. The former will not be making applications to the Medical Practices Committee after the appointed day in respect of their current practice. The latter do not contract with a family practitioner committee to provide services but are employed by general practitioners who


are on a family practitioner committee's list.
It may be that other groups will be exempted; for example, general practitioners who were at one time on the family practitioner committee list. As I said earlier, we may want to place some time limit which should elapse before they can re-apply automatically.
We shall also consider the position of other doctors who have been assistants or hospital doctors and who wish to move into general practice. It may be appropriate for them to be exempted, or it may be appropriate for them to apply for a certificate of equivalent experience, which has to be taken into account.

Dr. Vaughan: What will be the condition of Service doctors who leave the Armed Forces?

Mr. Deakins: Vocational training requirements apply only to the National Health Service. Many doctors in the Armed Forces already undertake vocational training in preparation for their return to civilian life. Their experience in the Armed Forces will be considered either under the certificate of prescribed experience or under the certificate of equivalent experience, whichever is the more appropriate.
I now turn to the thorny question of EEC medical practice which the hon. Members for Wallasey (Mrs. Chalker) and Fareham (Dr. Bennett) mentioned. We see mandatory vocational training as a necessary consequence of the emergence of general practice as a specialty in its own right, and there is certainly strong support for this approach among our Community partners, some of whom intend to move in the direction that we are taking, and some of whom have already done so. We should like to apply this requirement to all new principals after the appointed day. For that reason we wrote to Brussels recently, to the Directorate there, explaining our plans so that there could be full and informed discussions, and the discussions that we have had so far have been highly encouraging. I cannot say, for the benefit of the hon. Gentleman or the Committee, that they have yet been finalised. If problems are raised about applying this regulation to EEC doctors we shall look into it further, but we are con-

fident that we shall have the sympathy of our EEC partners, many of whom will be or already are in the same position.
We are not trail-blazers in this respect. If one looks at other EEC countries, one sees that most are agreed on the need to improve the postgraduate training periods for medical practitioners. Denmark already has a mandatory 18-months course, which is to be increased to three years from December of this year. The French are hoping to make a modest start by introducing a one-year course initially, aiming for a two-year course later. These arrangements, like those for Britain, apply only to the State-supervised health services. I cannot go further on the EEC point at the moment. We shall work very hard in Brussels to do our best to ensure that in terms of medical directives these arrangements do apply. I am not in a position to give an undertaking to the Committee when that will apply, but it is our intention that it should be subject to what happens in Brussels.
The hon. Gentleman asked about recruitment. Perhaps it will help if I deal with the more general problem which I am sure is in the minds of some hon. Members—it is in mine—and that is the effect on the number of general practitioners. Until the regulations are effective, any fully registered doctor can continue to enter general practice as a principal without further training after his pre-registration year. However, there has been an increasing tendency for doctors first to undertake voluntarily some form of vocational training. At the beginning of this year the number of trainees in Great Britain was about 900. About 1,300 new general practitioners are needed annually to replace deaths and retirements and to sustain the 1 per cent. growth of recent years. We do not expect the transition to the new compulsory position adversely to affect general practice or the numbers of doctors needed.
The hon. Gentleman and the hon. Lady were concerned about women doctors, and this was one of the major points with which the House of Lords were concerned. I have read through the debates with great interest. The argument used in the other place was that by lengthening the training period to perhaps five years or six years, and three


years extra—which means that we are talking about nine years—this would hinder the chances of women becoming general practitioner principals.
Certainly the period that we are discussing will considerably lengthen the time spent in training for general practice, but that has not discouraged those women who have already voluntarily become trainee general practitioners. About 28 per cent. of all trainee general practitioners in 1974 were women. Female principals made up only 12 per cent. of the total in the same year. There is a larger block of women coming in as we increase the intake of women into our medical schools, and I do not think that it would be right to require less training for women merely because they are women. No one argues that. We are trying to improve the standards of primary care, and we cannot do that unless we raise standards all round.
We shall meet the need to provide part-time training for doctors who are unable to work full time because of domestic commitments. That applies mainly, but not exclusively, to women—in accordance with a provision introduced by means of a Lords amendment—and we must ensure that that need is properly catered for. There is express provision in the Bill to safeguard that aspect. I give the Committee an assurance that we shall do our best in ongoing discussions on the detailed administrative arrangements to make sure that that provision is followed up.
I now turn to another of the points made by the hon. Member for Reading, South about costs. The Explanatory and Financial Memorandum refers to extra costs of £1 million. It may help the Committee if I explain how that figure was arrived at. The bulk of expenditure on vocational training at the moment, under the current voluntary system, is the cost of trainees in general practice. In hospitals they do jobs and are part of the hospital service. They do not just hang around and watch other people working.
While in general practice, each trainee receives a salary from the trainer, who in turn is reimbursed by the family practitioner committee. That salary is related to that of the last hospital post that

he held. The trainer, who is usually a general practitioner, also receives a fee for carrying out the training, which is at present £1,300 per annum.
Voluntary vocational training has been increasing steadily. The cost in the Bill is therefore the difference between where we might have been without statutory provision—bcause of the expansion in voluntary training arrangements—and where we expect to be with it. The total cost of mandatory vocational training is likely to be about £8½ million. The £1 million mentioned in the Bill is merely the extra cost. We think by the time the Bill becomes law we will be spending up to £7½ million on the voluntary arrangements. Therefore, we are basically concerned about the extra cost.
The hon. Gentleman asked about the selection of people for general practice. The Medical Practices Committee will not select future GPs. For example, some doctors will apply to their regional postgraduate deans to go on organised training programmes. Others will apply for hospital posts in the usual way and subsequently themselves seek a general practitioner trainer to look after them in the training year.
I now turn to the points raised by the hon. Member for Hereford (Mr. Shepherd). He asked about the make-up and constitutions of the bodies that will advise us under the terms of the regulations. He asked why they could not be embodied in a schedule. Perhaps I should say something about prescribed bodies. Those bodies will obviously be professional bodies and will include representatives of the medical profession from both the clinical and educational areas. We are expecting to make use of the existing bodies rather than to have to set up new bodies specifically for that purpose. Those that we have in mind are the Council for Postgraduate Medical Education, the regional postgraduate committees and the Joint Committee on Postgraduate Training for General Practice. The point that we are still considering with the profession—this is one of our difficulties—is which functions should be assigned on a regional basis and which should be on a central basis.
Let me deal with the appeals procedure, which is at the back of the hon. Gentleman's mind. The Bill gives power to


establish committees to hear appeals against refusals of certificates of prescribed experience or certificates of equivalent experience. These will be professional bodies set up after full consultation with the medical profession. Their composition will be determined by regulations, partly because we must still decide on the bodies that will issue these certificates, and partly to allow for change and development in the light of experience. We are embarking on something new here.
The hon. Member for Hereford also asked about public service manpower and increased training commitments under the Bill. We already have administrative arrangements for the organisation of vocational training on a voluntary basis. As many doctors—900 a year at present—are already doing this, we do not expect any increase in administrative staff to cope with the change from a voluntary to a statutory system. We hope that the existing administrative arrangements, especially in area health authorities and hospitals, will be able to cope with the problem—if, indeed, it will be a problem.
The hon. Member for Galloway (Mr. Thompson) asked about the deprived areas and finance for improvements in Scotland, and he welcomed the Bill. A general practitioner who seeks to become a trainer has first to satisfy the general practices sub-committee of the regional postgraduate committee that he can provide the necessary training facilities. Obviously, while we want to see an improvement in primary care, the kinds of improvements that the hon. Gentleman mentioned are not incorporated in the Bill as there are already sufficient approved trainers throughout the country to match the likely number of trainees.
Finally, let me deal with the points raised by the hon. Member for Wallasey. I think that I have already dealt with some of her points about women doctors. The hon. Lady asked about women doctors under the existing training scheme and quoted a point that was raised in the debate in the House of Lords. Following a conference which the previous Secretary of State for Social Services held at Sunningdale last year, the Department is reviewing the arrangements for women doctors in consultation with the medical profession. In these days of no sex discrimination I should perhaps refer to

"doctors with domestic commitments". There may, of course, be some men in the same position.
Obviously, we shall want to take account of the new measure. I assure the hon. Lady that I have taken note of her points. The Medical Women's Federation is represented on the General Medical Services Committee. However, if there should be specific problems which women would rather bring forward through their own organisation, we shall not say that we shall not consult it. If it wishes to put points to us, we shall be willing to discuss them with that body.
The hon. Lady's final point dealt with the encouragement of general practitioners in general practice who are at present exempt under the terms of the Bill from a compulsory period of vocational training. She asked how we might encourage them to have closer contact with hospitals and be brought up to date. That is a wider problem. There must be thousands of general practitioners who are already in general practice. Their number will diminish over the years. However, in the next couple of decades there will be many general practitioners who are already in general practice, received vocational training. There are extensive arrangements for the ongoing education of existing general practitioners.
I now turn to service questions. The new hospital practitioner grade is intended to encourage doctors to pursue a career based both in general practice and hospitals. Progress has been made in establishing these posts, but I am afraid that it is rather slow. We shall have to do our best to improve matters.
I hope that I have dealt with all the points that were raised in the debate. I am grateful to the members of the Committee for their comments. I hope that in the further consultations we shall produce both regulations and administrative arrangements that will satisfy both hon. Members and the medical profession.

Question put and agreed to.

Resolved,

That the Chairman do now report to the House that the Committee recommend that the National Health Service (Vocational Training) Bill [Lords] ought to be read a Second time.

Mr. Deakins: May I, Sir Donald, on behalf of the Committee thank you for


the good-humoured way in which you have presided over our deliberations. It is pleasant for us to see you in charge. We are perhaps sorry that we have not given you a whole morning's work, but I am most grateful that we managed to finish in just over an hour.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:


Kaberry, Sir Donald (Chairman)
Hatton, Mr.


Bennett, Dr. Reginald
Hunt, Mr. David


Chalker, Mrs.
Lester, Mr. Jim


Crouch, Mr.
Lomas, Mr.


Crowther, Mr. Stan
Shepherd, Mr.


Cunningham, Mr. George
Thompson, Mr.


Deakins, Mr.
Vaughan, Dr.


Harper, Mr.

Dr. Vaughan: We join in that expression of appreciation of your chairmanship, Sir Donald.

The Chairman: Thank you. Nunc dimittis.

Committee rose at twenty-two minutes to Twelve o'clock.